The nucleotide sequence of the prolipoprotein signal peptidase (lsp) gene has been determined. The lsp gene was found to be adjacent to the isoleucyl-tRNA synthetase ( ileS ) gene, such that the termination codon of the ileS gene overlaps with the initiation codon of lsp. These two genes are transcribed in the same direction and the major promotor for the lsp gene appears to be upstream of ileS . Identification of the lsp gene was established by amplification of prolipoprotein signal peptidase activity in strains carrying a subcloned 1.1-kilobase Stu I-Acc I fragment and was further confirmed by introducing mutational alterations in the COOH terminus of the protein that caused a decrease in prolipoprotein signal peptidase activity. The deduced amino acid sequence indicates that prolipoprotein signal peptidase contains 164 residues. Unlike most exported proteins, there is no apparent signal peptide sequence for the lsp protein. Computer-assisted secondary structure analysis of the deduced amino acid sequence identified four hydrophobic regions that share features common to transmembrane segments in integral membrane proteins.