The Aspergillus nidulans pH-responsive transcription factor PacC is modulated by limited, two-step proteolysis. The first, pH-regulated cleavage occurs in the 24-residue highly conserved "signaling protease box" in response to the alkaline pH signal. This is transduced by the Pal signaling pathway, containing the predicted calpain-like cysteine protease and likely signaling protease, PalB. In this work, we carried out classical mutational analysis of the putative signaling protease PalB, and we describe 9 missense and 18 truncating loss-of-function (including null) mutations. Mutations in the region of and affecting directly the predicted catalytic cysteine strongly support the deduction that PalB is a cysteine protease. Truncating and missense mutations affecting the C terminus highlight the importance of this region. Analysis of three-hemagglutinin-tagged PalB in Western blots demonstrates that PalB levels are independent of pH and Pal signal transduction. We have followed the processing of MYC(3)-tagged PacC in Western blots. We show unequivocally that PalB is essential for signaling proteolysis and is definitely not the processing protease. In addition, we have replaced 15 residues of the signaling protease box of MYC(3)-tagged PacC (pacC900) with alanine. The majority of these substitutions are silent. Leu481Ala, Tyr493Ala, and Gln499Ala result in delayed PacC processing in response to shifting from acidic to alkaline medium, as determined by Western blot analysis. Leu498Ala reduces function much more markedly, as determined by plate tests and processing recalcitrance. Excepting Leu498, this demonstrates that PacC signaling proteolysis is largely independent of sequence in the cleavage region.