On treatment of Escherichia coli cells with globomycin, a glyceride-containing precursor of the major outer membrane lipoprotein accumulates in the cytoplasmic membrane (Hussain, M., Ichihara, S., and Mizushima, S. (1980) J. Biol. Chem. 255, 3707-3712). When the envelope fraction from such cells was incubated in a suitable buffer, this precursor could be processed to the mature lipoprotein. The processing involved removal of the signal peptide and subsequent acylation of the NH2 terminus thus bared. Two types of peptidase and an acylation enzyme(s) were found to be involved in these processes. The enzyme that cleaves the signal peptide, called signal peptidase in this paper, had many unique properties: being highly resistant to high temperature, having a wide optimum pH range, and being highly sensitive to detergents. The other peptidase(s), called signal peptide peptidase in this paper, was assumed to be responsible for the digestion of the signal peptide that had been cleaved from the precursor lipoprotein. This enzyme was rather heat-sensitive. Thus the processing from the precursor to the mature lipoprotein at a high temperature resulted in accumulation of a peptide that was most probably the intact signal peptide. The third enzyme(s) involved in the processing was the one that is responsible for acylation of the newly bared NH2 terminus of the lipoprotein. The enzyme activity was also lost at 80 degrees C. In the light of these findings, the biosynthetic pathway of the lipoprotein is discussed.