Prepro-parathyroid hormone-related protein (ppPTHrP) has two targeting signals, an N-terminal signal sequence and a nuclear localization signal (NLS). In fact, the protein is not only secreted from the cell but also found in the nucleus and/or nucleolus. In order to understand the function of the PTHrP signal sequence for the dual localization, the signal sequence cleavage of a series of ppPTHrP deletion mutants fused to Escherichia coli leader peptidase was analysed in vitro and in several cell lines. Efficiency of the PTHrP signal sequence cleavage was intrinsically low in the in vitro reconstitution system. In cultured cells, cleavage efficiency of the PTHrP signal sequence varied significantly, being lowest in COS-1 cells, but rising in HeLa, HEK293 and CV-1 cells. However, virtually complete signal sequence cleavage was observed in CHO cells. In addition, the NLS of PTHrP had a negative effect on its own signal sequence cleavage, which could be enhanced by deletion of the spacer sequence between the signal sequence and the NLS. There was a roughly inverse relationship between the signal sequence cleavage and the nuclear localization of PTHrP. Thus, the final destination of PTHrP could be regulated at the ER membrane.