Signal sequences, known to mediate the targeting of nascent secreted proteins to membranes, share common structural domains: a positively charged amino-terminus, a hydrophobic core, and a signal cleavage domain. Mutations have been introduced into the cDNA encoding the signal sequence of the mammalian protein preproparathyroid hormone to analyze the roles played by the signal cleavage domain in secretion. Two mutant genes were constructed, missing the entire six-residue propeptide sequence and several residues of the signal cleavage domain. The effects of these mutations on signal function were assessed after expression in clonal cell lines and in a transcription-linked translation system. Alterations in the signal cleavage domain resulted in reduced translocation and signal cleavage. Furthermore, in one mutant, the removal of the signal cleavage domain converted the signal into a membrane anchor sequence. The nonhydrophobic sequences at the end of the signal sequence thus crucially affect the translocation, cleavage, and membrane-binding properties of signal sequences.