The proprotein convertase subtilisin kexin isozyme-1 (SKI-1)/site-1 protease (S1P) is implicated in lipid homeostasis, the unfolded protein response, and lysosome biogenesis. The protease is further hijacked by highly pathogenic emerging viruses for the processing of their envelope glycoproteins. Zymogen activation of SKI-1/S1P requires removal of an N-terminal prodomain, by a multistep process, generating the mature enzyme. Here, we uncover a modular structure of the human SKI-1/S1P prodomain and define its function in folding and activation. We provide evidence that the N-terminal AB fragment of the prodomain represents an autonomous structural and functional unit that is necessary and sufficient for folding and partial activation. In contrast, the C-terminal BC fragment lacks a defined structure but is crucial for autoprocessing and full catalytic activity. Phylogenetic analysis revealed that the sequence of the AB domain is highly conserved, whereas the BC fragment shows considerable variation and seems even absent in some species. Notably, SKI-1/S1P of arthropods, like the fruit fly Drosophila melanogaster, contains a shorter prodomain comprised of full-length AB and truncated BC regions. Swapping the prodomain fragments between fly and human resulted in a fully mature and active SKI-1/S1P chimera. Our study suggests that primordial SKI-1/S1P likely contained a simpler prodomain consisting of the highly conserved AB fragment that represents an independent folding unit. The BC region appears as a later evolutionary acquisition, possibly allowing more subtle fine-tuning of the maturation process.