Signal peptidases (SPases) remove signal peptides from secretory proteins. The sipS (signal peptidase of subtilis) gene, which encodes an SPase of Bacillus subtilis, was cloned in Escherichia coli and was also found to be active in E.coli. Its overproduction in B.subtilis resulted in increased rates of processing of a hybrid beta-lactamase precursor. The SipS protein consisted of 184 amino acids (mol. wt 21 kDa). The protein showed sequence similarity with the leader peptidases of E.coli and Salmonella typhimurium, and the mitochondrial inner membrane protease I of Saccharomyces cerevisiae. Patterns of conserved amino acids present in these four proteins were also detected in the Sec11 subunit of the SPase complex of S.cerevisiae and the 18 and 21 kDa subunits of the canine SPase complex. Knowledge of the sequence of SipS was essential for the detection of these similarities between prokaryotic and eukaryotic SPases. The data suggest that these proteins, which have analogous functions, belong to one class of enzymes, the type I SPases.