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Peroxisomes play an important role in β‐oxidation of fatty acids. All peroxisomal matrix proteins are synthesized in the cytosol and post‐translationally sorted to the organelle. Two distinct peroxisomal signal targeting sequences (PTSs), the C‐terminal PTS1 and the N‐terminal PTS2, have been defined. Import of precursor PTS2 proteins into the peroxisomes is accompanied by a proteolytic removal of the N‐terminal targeting sequence. Although the PTS1 signal is preserved upon translocation, many PTS1 proteins undergo a highly selective and limited cleavage. Here, we demonstrate that Tysnd1, a previously uncharacterized protein, is responsible both for the removal of the leader peptide from PTS2 proteins and for the specific processing of PTS1 proteins. All of the identified Tysnd1 substrates catalyze peroxisomal β‐oxidation. Tysnd1 itself undergoes processing through the removal of the presumably inhibitory …