CAAX farnesyltransferase attaches a farnesyl group to proteins that terminate in the sequence CAAX, where C is cysteine, A is an aliphatic amino acid, and X is typically methionine or serine. A limited number of substrates for the CAAX farnesyltransferase have been identified in cultured cells. These include p21ras proteins and the nuclear lamins A and B. We describe here the use of a CAAX farnesyltransferase inhibitor, together with a hamster cell line that exhibits efficient uptake of [3H]mevalonate, as a means of identifying novel farnesylated proteins. One candidate protein was purified and its attached prenyl group identified as farnesyl. The predicted amino acid sequence of this protein, deduced from a cloned cDNA, terminates with the tetrapeptide Cys-Leu-Ile-Met, which conforms to the consensus sequence for recognition by farnesyltransferase. This farnesylated protein, designated PxF, is localized to the outer surface of peroxisomes as determined by indirect immunofluorescence and electron microscopy.