Purified yeast copper-metallothionein lacks 8 amino-terminal residues that are predicted from the DNA sequence of its gene. The removed sequence is unusual for metallothionein in its high content of hydrophobic and aromatic residues and its similarity to mitochondrial leader sequences. To study the significance of this amino-terminal cleavage, several mutations were introduced into the metallothionein coding gene, CUP1. One mutant, which deletes amino acid residues 2-8, had a minor effect on the ability of the molecule to confer copper resistance to yeast but did not affect CUP1 gene regulation. A second mutation, which changes two amino acids adjacent to the cleavage site, blocked removal of the extension peptide but had no effect on copper detoxification or gene regulation. Immunofluorescence studies showed that both the wild-type and these two mutant proteins are predominantly cytoplasmic with no evidence for mitochondrial localization. The cleavage site mutation allowed isolation and structural characterization of a full length metallothionein polypeptide. The copper content and luminescent properties of this molecule were identical to those of the truncated wild-type protein indicating a homologous cluster structure. Moreover, the amino-terminal peptide was selectively removed by various endopeptidases and an exopeptidase suggesting that it does not participate in the tertiary fold. These results argue that the amino-terminal peptide is not required for either the structural integrity or biological function of yeast metallothionein.