A mechanism is described whereby one and the same gene can encode both a receptor protein as well as its specific ligand. Generation of this receptor–ligand partnership is effected by proteolytic cleavage within a specific module located in a membrane resident protein. It is postulated here that the “SEA” module, found in a number of heavily O‐linked glycosylated membrane‐associated proteins, serves as a site for proteolytic cleavage. The subunits generated by proteolytic cleavage of the SEA module reassociate, and can subsequently elicit a signaling cascade. We hypothesize that all membrane resident proteins containing such a “SEA” module will undergo cleavage, thereby generating a receptor–ligand alliance. This requires that the protein subunits resulting from the proteolytic cleavage reassociate with each other in a highly specific fashion. The same SEA module that serves as the site for proteolytic cleavage, probably also contains the binding sites for reassociation of the resultant two subunits. More than one type of module can function as a site for proteolytic cleavage; this can occur not only in one‐pass membrane proteins but also in 7‐transmembrane proteins and other membrane‐associated proteins. The proposal presented here is likely to have significant practical consequences. It could well lead to the rational design and identification of molecules that, by binding to one of the cleaved partners, will act either as agonists or antagonists, alter signal transduction and, hence, cellular behavior.