Pathway of a-factor biogenesis. The a-factor precursor, biosynthetic intermediates, and components of the biogenesis machinery are shown. The biogenesis of a-factor is comprised of three stages, indicated at left: (a) COOH-terminal CAAX processing, (b) two sequential NH2-terminal proteolytic cleavages, and (c) export. The a-factor precursor (P0, top) consists of the mature, bioactive portion (black) flanked by an NH2-terminal extension (two shades of gray) and a COOH-terminal CAAX motif. Mature a-factor is a prenylated and carboxyl methylated dodecapeptide (M, bottom). The known a-factor biosynthetic intermediates that can be directly visualized by SDS-PAGE are designated P0, P1, P2, and M (). In this study, we present the previously undetected intermediate P0*. The cellular components that mediate COOH-terminal CAAX modification events (prenylation, AAX proteolysis, carboxyl methylation) are the Ram1p/Ram2p complex, Rce1p and Ste24p, and Ste14p, respectively (refer to text for more details). NH2-terminal processing involves two successive proteolytic steps. The first NH2-terminal cleavage step (P1→ P2) is mediated by Ste24p (as confirmed by this study), and the second step (P2→ M) requires Axl1p or Ste23p. The dual roles of Ste24p in COOH-terminal AAXing and the first NH2-terminal (P1→ P2) processing step is the subject of this study.