IL-12 is a heterodimeric cytokine produced by APC that critically regulates cell-mediated immunity. Because of its crucial function during immune responses, IL-12 production is stringently regulated, in part through transcriptional control of its p35 subunit, which requires the differentiative effects of IFN-γ for expression. To determine whether post-transcriptional aspects of IL-12 production might be regulated, we examined intracellular protein processing of each subunit. We report here that p40 and p35 subunits are processed by disparate pathways. Whereas processing of p40 conforms to the cotranslational model of signal peptide removal concomitant with translocation into the endoplasmic reticulum (ER), processing of p35 does not. Translocation of the p35 preprotein into the ER was not accompanied by cleavage of the signal peptide; rather, removal of the p35 signal peptide occurred via two sequential cleavages. The first cleavage took place within the ER, and the cleavage site localized to the middle of the hydrophobic region of the signal peptide. Although the preprotein was glycosylated upon entry into the ER, its glycosylation status did not affect primary cleavage. Subsequently, the remaining portion of the p35 signal peptide was removed by a second cleavage, possibly involving a metalloprotease, concomitant with additional glycosylation and secretion. Secretion could be inhibited by mutation of the second cleavage site or by inhibition of glycosylation with tunicamycin. In contrast, p40 secretion was not affected by inhibition of glycosylation. Our findings demonstrate that IL-12 subunits are processed by disparate pathways and suggest new modalities for regulation of IL-12 production.