It has generally been assumed that the conversion of all inactive protein precursors to biologically active proteins is mediated by specific processing enzymes. However, numerous examples of self-catalyzed protein rearrangements have recently been discovered, including protein splicing and autoproteolysis of hedgehog proteins, glycosylasparaginases and pyruvoyl enzyme precursors. The initial formation of an ester bond by the acyl rearrangement of a peptide bond is a common feature of all of these autoprocessing reactions, which manifest themselves in diverse biological functions ranging from protein splicing to protein targeting, proenzyme activation, and the generation of enzyme-bound prosthetic groups. Although such acyl rearrangements are thermodynamically unfavorable, their coupling to diverse types of self-catalyzed irreversible steps drives the protein rearrangements to completion.