We exploited the light-activated fluorescent properties of the green fluorescent protein (GFP) of the jellyfish Aequorea victoria for studies on the peroxisomal sorting of polypeptides. GFP and GFP-SKL (containing a C-terminal, tripeptide peroxisomal targeting signal, SKL) were expressed from a methanol-inducible, alcohol oxidase (AOX1) promoter in the methylotrophic yeast Pichia pastoris. GFP was cytosolic, whereas the GFP-SKL fusion protein was targeted to peroxisomes, as demonstrated by biochemical fractionation of organelles on Nycodenz gradients. Neither GFP nor GFP-SKL affected the viability of yeast cells but both were fluorescent on excitation with 395-nm UV light. The subcellular locations of GFP and GFP-SKL in living yeast cells were monitored by fluorescence microscopy and their fluorescence was coupled to photo-oxidation of diaminobenzidine (DAB), resulting in the deposition of electron-dense oxidized DAB at intracellular locations of GFP derivatives. This photooxidation procedure permitted facile ultrastructural localization of GFP in cells by electron microscopy, and provided further evidence that GFP produced in P. pastoris is cytosolic, whereas GFP-SKL is peroxisomal. The GFP-SKL fusion protein is therefore a versatile reporter for the peroxisomal compartment, with many applications for studies involving peroxisomal import and biogenesis.