According to current models of peroxisomal biogenesis, Pex5p cycles between the cytosol and the peroxisome transporting newly synthesized proteins to the organelle matrix. However, little is known regarding the mechanism of this pathway. Here, we show that Pex5p enters and exits the peroxisomal compartment in a process that requires ATP. Insertion of Pex5p into the peroxisomal membrane is blocked by anti-Pex14p IgGs. At the peroxisomal level, two Pex14p-associated populations of Pex5p could be resolved, stage 2 and stage 3 Pex5p, both exposing the majority of their masses into the organelle lumen. Stage 3 Pex5p can be easily detected only under ATP-limiting conditions; in the presence of ATP it leaves the peroxisomal compartment rapidly. Our data suggest that translocation of PTS1-containing proteins across the peroxisomal membrane occurs concomitantly with formation of the Pex5p-Pex14p membrane complex and that this is probably the site from which Pex5p leaves the peroxisomal compartment.