PTH is initially synthesized as a larger precursor, containing a 25 amino acid signal sequence. Modification of cDNA encoding the hormone precursor resulted in the synthesis of proteins whose signal sequences were shortened at their amino termini. The effects of these mutations were analyzed using a cell-free translation system and rat pituitary GH4 cells in culture. Removal of the first six amino acids of the signal sequence had no effect on the efficiency or kinetics of protein processing as measured in the two assay systems. Mutants lacking 10 or 13 amino acids were not processed efficiently in the cells, nor were they translocated across microsomes in the cell-free translation system. These studies suggest that a modest change in the hydrophobic domain of the signal sequence, which might not have been predicted to alter function, led to a dramatic decline in signal activity.