Pex5p, the peroxisomal protein cycling receptor, binds newly synthesized peroxisomal matrix proteins in the cytosol and promotes their translocation across the organelle membrane. During its transient passage through the membrane, Pex5p is monoubiquitinated at a conserved cysteine residue, a requisite for its subsequent ATP-dependent export back into the cytosol. Here we describe the properties of the soluble and membrane-bound monoubiquitinated Pex5p species (Ub-Pex5p). Our data suggest that 1) Ub-Pex5p is deubiquitinated by a combination of context-dependent enzymatic and nonenzymatic mechanisms; 2) soluble Ub-Pex5p retains the capacity to interact with the peroxisomal import machinery in a cargo-dependent manner; and 3) substitution of the conserved cysteine residue of Pex5p by a lysine results in a quite functional protein both in vitro and in vivo. Additionally, we show that MG132, a proteasome inhibitor, blocks the import of a peroxisomal reporter protein in vivo.Since the discovery of the ubiquitin-conjugating cascade nearly 30 years ago, thousands of proteins have been shown to be modified by ubiquitin (1, 2). In many cases ubiquitination of a protein is linked to its proteasomal degradation (3), whereas in a growing number of examples, ubiquitination of a protein is used as a transient modification to modulate its biological properties (for a review see Ref. 4). Regardless of the final outcome, it is generally assumed and in many cases demonstrated that ubiquitin is covalently attached through an amide bond involving the carboxyl group of the last glycine of ubiquitin on one hand, and an amino group of the targeted protein on the other (5). Recent findings from several laboratories, however, suggest that this rule is not always valid, and proteins ubiquitinated at serines and threonines (yielding oxyesters) or even cysteines (forming thiol esters) have been identified (6 -10).Protein ubiquitination at cysteine residues is a particularly puzzling phenomenon for two reasons. First, on a thermodynamic basis it is the least favorable event (the approximate free energy changes for acyl shifts from a thiol ester to a thiol, alcohol, and amine are 0, Ϫ2.4, and Ϫ11 kcal/mol, respectively (11, 12)). Second, although data on the half-lives of ubiquitin-protein thiol ester conjugates under physiologically relevant conditions are scarce, it is known that ubiquitin thiol esters are easily disrupted by nucleophiles such as GSH (13), raising the possibility that, to some degree, proteins subjected to this kind of conjugation may undergo futile ubiquitination/deubiquitination cycles. Thus, a thiol ester bond appears not to be the most efficient way to link ubiquitin to a protein, unless, of course, the aim is to create an activated (easily transferable) form of ubiquitin, as is in fact the case with ubiquitin-activating enzymes (E1s), 4 ubiquitin-conjugating enzymes (E2s), and some ubiquitin ligases (E3s) (2).In the last years we have been characterizing Pex5p, one of the three presently known proteins claimed to be ub...