Peroxisomes are dynamic organelles that often proliferate in response to compounds that they metabolize. Peroxisomes can proliferate by two apparent mechanisms, division of preexisting peroxisomes and de novo synthesis of peroxisomes. Evidence for de novo peroxisome synthesis comes from studies of cells lacking the peroxisomal integral membrane peroxin Pex3p. These cells lack peroxisomes, but peroxisomes can assemble upon reintroduction of Pex3p. The source of these peroxisomes has been the subject of debate. Here, we show that the amino-terminal 46 amino acids of Pex3p of Saccharomyces cerevisiae target to a subdomain of the endoplasmic reticulum and initiate the formation of a preperoxisomal compartment for de novo peroxisome synthesis. In vivo video microscopy showed that this preperoxisomal compartment can import both peroxisomal matrix and membrane proteins leading to the formation of bona fide peroxisomes through the continued activity of full-length Pex3p. Peroxisome formation from the preperoxisomal compartment depends on the activity of the genes PEX14 and PEX19, which are required for the targeting of peroxisomal matrix and membrane proteins, respectively. Our findings support a direct role for the endoplasmic reticulum in de novo peroxisome formation.A characteristic of eukaryotic cells is the presence of seemingly distinct subcellular compartments or organelles possessing specific sets of proteins required for specialized cellular functions. However, organelles do not exist in isolation, and interorganellar communication through the movement and exchange of different molecules is required for normal cell function. This interdependence of organelles extends beyond their biochemical and metabolic roles and necessitates that their biogenesis and turnover also be coordinated.The peroxisome has long been considered an autonomous organelle that proliferates by the growth and division of preexisting peroxisomes (1) and is inherited as a functional organelle at cell division. But what of the concept of de novo peroxisome biogenesis? From an evolutionary point of view, peroxisome proliferation and inheritance could have evolved as a response to a slow and perhaps unreliable mechanism of de novo peroxisome biogenesis. However, de novo peroxisome biogenesis, when combined with peroxisome growth, division, and inheritance, would provide the cell with a fail-safe system for peroxisome maintenance and ultimately for its survival.Evidence implicating the endoplasmic reticulum (ER) 3 in peroxisome biogenesis has accumulated in recent years (reviewed in Refs. 2-4). The amino-terminal 16 amino acids of the peroxisomal integral membrane protein Pex3p of Hansenula polymorpha were shown to be sufficient to target a reporter protein to the ER (5), whereas treatment of cells of this yeast with brefeldin A led to the accumulation of newly synthesized peroxisomal membrane and matrix proteins at the ER (6). In the yeast Yarrowia lipolytica, the peroxisomal membrane proteins Pex2p and Pex16p were shown to traffic through the E...