Peptide splicing is a newly described mode of production of antigenic peptides presented by MHC class I molecules, whereby two noncontiguous fragments of the parental protein are joined together after excision of the intervening segment. Three spliced peptides have been described. In two cases, splicing involved the excision of a short intervening segment of 4 or 6 aa and was shown to occur in the proteasome by transpeptidation resulting from the nucleophilic attack of an acyl-enzyme intermediate by the N terminus of the other peptide fragment. For the third peptide, which is derived from fibroblast growth factor-5 (FGF-5), the splicing mechanism remains unknown. In this case, the intervening segment is 40 aa long. This much greater length made the transpeptidation model more difficult to envision. Therefore, we evaluated the role of the proteasome in the splicing of this peptide. We observed that the spliced FGF-5 peptide was produced in vitro after incubation of proteasomes with a 49-aa-long precursor peptide. We evaluated the catalytic mechanism by incubating proteasomes with various precursor peptides. The results confirmed the transpeptidation model of splicing. By transfecting a series of mutant FGF-5 constructs, we observed that reducing the length of the intervening segment increased the production of the spliced peptide, as predicted by the transpeptidation model. Finally, we observed that trans-splicing (i.e., splicing of fragments from two distinct proteins) can occur in the cell, but with a much lower efficacy than splicing of fragments from the same protein.