A systematic study of the signal peptidase cleavage site of the main cell-wall-repressible Saccharomyces cerevisiae acid phosphatase encoded by the PHO5 gene is presented. The last amino acid of the signal sequence, the chromosomally encoded alanine of the wild-type gene, was changed by any of 19 other amino acids in the chromosomal DNA by using in vitro mutagenesis in Escherichia coli and the technique of gene replacement. Processing and secretion are normal when the amino acid at this position is a small neutral amino acid, i.e. alanine, glycine, cysteine, serine or threonine. Processing glycosylation, and secretion of regulated acid phosphatase are distinctly affected with other amino acid substitutions and core-glycosylated protein accumulates in the cell. Surprisingly, PHO5 protein is still secreted to the cell wall and into the growth medium but at a lower rate and without cleavage of the signal sequence. The same features are exhibited by a mutated acid phosphatase with a deletion of four amino acids at the end of the signal peptide (-7 to -4 relative to the processing site) thus preserving the important -3 to -1 region.