Human HCF-1 (also referred to as HCFC-1) is a transcriptional co-regulator that undergoes a complex maturation process involving extensive O-GlcNAcylation and site-specific proteolysis. HCF-1 proteolysis results in two active, noncovalently associated HCF-1N and HCF-1C subunits that regulate distinct phases of the cell-division cycle. HCF-1 O-GlcNAcylation and site-specific proteolysis are both catalyzed by O-GlcNAc transferase (OGT), which thus displays an unusual dual enzymatic activity. OGT cleaves HCF-1 at six highly conserved 26 amino acid repeat sequences called HCF-1PRO repeats. Here we characterize the substrate requirements for OGT cleavage of HCF-1. We show that the HCF-1PRO-repeat cleavage signal possesses particular OGT-binding properties. The glutamate residue at the cleavage site that is intimately involved in the cleavage reaction specifically inhibits association with OGT and its bound cofactor UDP-GlcNAc. Further, we identify a novel OGT-binding sequence nearby the first HCF-1PRO-repeat cleavage signal that enhances cleavage. These results demonstrate that distinct OGT-binding sites in HCF-1 promote proteolysis, and provide novel insights into the mechanism of this unusual protease activity.