In eukaryotes small secreted peptides are often proteolytically cleaved from larger precursors. In Saccharomyces cerevisiae multiple proteolytic processing steps are required for production of mature 12-amino-acid a-factor from its 36-amino-acid precursor. This study provides additional genetic data supporting a direct role for Afc1p in cleavage of the carboxyl-terminal tripeptide from the CAAX motif of the prenylated a-factor precursor. In addition, Afc1p had a second role in a-factor processing that was independent of, and in addition to, its role in the carboxyl-terminal processing in vivo. Using ubiquitin-a-factor fusions we confirmed that the pro-region of the a-factor precursor was not required for production of the mature pheromone. However, the pro-region of the a-factor precursor contributed quantitatively to a-factor production.