Two staphylococcal protein-A signal sequences were constructed and tested for function in Escherichia coli, after being linked to human parathyroid hormone (hPTH) cDNAS representing the intact form (1-84 amino acids) and two N-terminal (1-37 and 1-7 amino acids) peptides. One signal sequence was identical to the wild type, and the other signal contained a deletion of 12 bp at the 3' end. The truncated hPTH cDNAs were fused at their 3' ends to IgG-binding domains (ZZ) derived from protein A in order to facilitate purification and characterization. The expression plasmid pSPTH, containing the wild-type signal sequence, secreted efficiently the intact recombinant hPTH (1-84) into the medium. Plasmids containing the truncated hPTH genes after the wild-type signal, gave rise to hPTH-ZZ hybrid proteins which were correctly processed at the N-terminal, but the major fractions appeared in the periplasmic compartment. In contrast, the plasmid pS'PTH which harboured the 4-amino-acid signal deletion did not promote a uniform secretion of intact hPTH (1-84) to the medium, but released a non-processed form both into the periplasmic compartment and to the medium. The related plasmids pS'PTH37ZZ and pS'PTH7ZZ with the mutated signal sequence gave rise to small or trace amounts of unprocessed forms of fusion proteins in the medium and periplasm, thus the secretion competence was markedly reduced. Thus, for correct N-terminal processing, we conclude that the amino acid sequence in the signal adjacent to the expressed protein, is a key determinant. However, release into the medium or periplasmic space appeared to be dependent also on protein folding, irrespective of signal-sequence cleavage. Furthermore, we observed that the peptides with the wild-type signal sequence and correct N-terminal processing, were the only forms that showed internal cleavage of hPTH. Uncleaved signals may contribute to folding characteristics of the ensuing protein and e.g., prevent internal proteolysis.