The endoplasmic reticulum of mammalian cells contains a heat shock protein of almost-equal-to 70 kDa (hsp70) termed binding protein BiP that is thought to promote the folding and subunit assembly of newly synthesized proteins. To study BiP function, we placed the BiP-encoding gene from Saccharomyces cerevisiae under the control of a regulated promoter and examined the effects of BiP depletion. Reduction of BiP protein to about 15% of normal levels led to a profound reduction in secretion of alpha-factor and invertase. At the same time, unglycosylated precursors of these proteins accumulated intracellularly. The predominant form of the invertase precursor had undergone signal sequence cleavage but accumulated as a soluble species in the cytosol. In contrast, the alpha-factor precursor was exclusively in the signal-uncleaved form. It sedimented with microsomal membranes and was exposed at the cytoplasmic face in a protease-resistant form. These findings suggest that, in yeast, BiP function is required for translocation of soluble proteins into the endoplasmic reticulum at a stage beyond the initial nascent chain-membrane association.