The propeptide of carboxypeptidase Y from Saccharomyces cerevisiae is important for folding of the enzyme. Previous work [Ramos, C., Winther, J.R. & Kielland-Brandt, M. C. (1994) J. Biol. Chem. 269, 7006-7012] suggested that the sequences essential for in vivo folding were situated in the COOH-proximal third of the propeptide. Concentrating on this region we have investigated the functionality of propeptide variants. Using a random mutagenesis approach we found that two segments can be defined: one in which there is a fairly high tolerance for substitution with unrelated sequences and another that has a more strict requirement for sequence conservation. Nevertheless, an overall lack of requirement for propeptide sequence conservation was found by substitution of the carboxypeptidase Y propeptide with that of a highly divergent propeptide sequence from an otherwise similar carboxypeptidase from Candida albicans. This propeptide was partially functional when combined with carboxypeptidase Y. Analysis of the biosynthesis of the mutant forms of the zymogen showed that a fraction of the molecules proceeded from the endoplasmic reticulum with fairly rapid kinetics, while the rest was degraded.