We have cloned the gene for the resident luminal ER protein BiP from the fission yeast, Schizosaccharomyces pombe. The predicted protein product is equally divergent from the budding yeast and mammalian homologues. Disruption of the BiP gene in S. pombe is lethal and BiP mRNA levels are regulated by a variety of stresses including heat shock. Immunofluorescence of cells expressing an epitope-tagged BiP protein show it to be localized to the nuclear envelope, around the cell periphery and in a reticular structure through the cytoplasm. Unexpectedly, we find the BiP protein contains an N-linked glycosylation site which can be utilized. The C-terminal four amino acids of BiP are Ala-Asp-Glu-Leu, a new variant of the XDEL sequence found at the C-termini of luminal endoplasmic reticulum proteins. To determine whether this sequence acts as a sorting signal in S.pombe we expressed an acid phosphatase fusion protein extended at its C-terminus with the amino acids ADEL. Analysis of the sorting of this fusion protein indicates that the ADEL sequence is sufficient to cause the retention of proteins in the endoplasmic reticulum. The sequences DDEL, HDEL and KDEL can also direct ER-retention of acid phosphatase in S.pombe.