Nascent translation products of PI-G-anchored membrane proteins contain both NH2- and COOH-terminal signal sequences of almost-equal-to 15-30 residues that are removed during processing. Removal of the latter occurs concomitant with the addition of the PI-G moiety to the newly formed COOH terminus. In human placental alkaline phosphatase (PLAP) the COOH-terminal signal peptide contains 29 residues. An engineered form of PLAP, miniPLAP 208, containing the same NH2- and COOH-terminal signal peptides as PLAP, was used as a substrate for cell-free processing. A comparison was made with mutants (DELTA-202, DELTA-197, DELTA-184, and DELTA-179) truncated at the COOH terminus. Intact preprominiPLAP 208 and truncated DELTA-202 were processed to yield the same mature product which, by size and distribution between Triton X-114 and water before and after treatment with inositol-specific phospholipases, indicates that it contained the PI-G moiety. Mutants that were further truncated at the COOH terminus, miniPLAPs DELTA-197, DELTA-184, and DELTA-179, were processed only at their NH2 termini. Those portions of the COOH-terminal sequence in miniPLAPs DELTA-197 and DELTA-184 that extended beyond residue 179 were not removed during processing.