Based on the kinetic model of substrate phage proteolysis, we have formulated a strategy for best manipulating the conditions in screening phage display libraries for protease substrates (Sharkov, N. A., Davis, R. M., Reidhaar-Olson, J. F., Navre, M., and Cai, D. (2001) J. Biol. Chem. 276, 10788 -10793). This strategy is exploited in the present study with signal peptidase SpsB from Staphylococcus aureus. We demonstrate that highly active substrate phage clones can be isolated from a phage display library by systematically tuning the selection stringency in screening. Several of the selected clones exhibit superior reactivity over a control, the best clone, SIIIRIII-8, showing >100-fold improvement. Because no conserved sequence features were readily revealed that could allow delineation of the active and unreactive clones, the sequences identified in five of the active clones were tested as synthetic dodecamers, Ac-AGX 8 GA-NH 2 . Using electrospray ionization mass spectrometry, we show that four of these peptides can be cleaved by SpsB and that Ala is the P1 residue exclusively and Ala or Leu the P3 residue, in keeping with the (؊3, ؊1) rule for substrate recognition by signal peptidase. Our successful screening with SpsB demonstrated the general applicability of the screening strategy and allowed us to isolate the first peptide substrates for the enzyme.Bacterial type I signal peptidase is responsible for cleaving the signal peptide from precursor proteins, and its activity is an integral part of the export and maturation of secreted proteins in vivo. The essential function of the enzyme to bacterial cell viability has been demonstrated using genetic approaches with both Gram-positive and Gram-negative organisms (1-3), supporting the notion that the signal peptidase is potentially an antibacterial target (4). Drug discovery efforts with the enzyme, however, may be hampered by the lack of an effective in vitro assay employing a nonprotein substrate such as a peptide (4).Our current understanding is that signal peptides are highly variable in sequence (5). Based on the studies carried out over the past 2 decades, it has been established that the recognition sites for signal peptidases lie between Ϫ6 and ϩ1 in sequences encompassing the site of cleavage (6 -12). Sequence conservation analyses of a large panel of naturally occurring signal peptides in bacteria and eukaryotes reveal that the predominant residue at the P1 site is Ala and that the predominant residues at the P3 site are large aliphatic residues (Leu, Ile, Val) as well as Ala and Ser, a consensus dubbed the (Ϫ3, Ϫ1) rule (9 -11). The (Ϫ3, Ϫ1) rule also holds for the cleavage of engineered preproteins in vivo as well as in vitro (6 -8, 12). The reaction of signal peptidases with synthetic peptides, on the other hand, is not as well explored as with protein substrates. For the signal peptidase LepB from Escherichia coli, the best characterized signal peptidase, Ala was found as the only residue permitted at the P1 site through single amino acid replace...