We isolated the LIP2 gene from the lipolytic yeast Yarrowia lipolytica. It was found to encode a 334-amino-acid precursor protein. The secreted lipase is a 301-amino-acid glycosylated polypeptide which is a member of the triacylglycerol hydrolase family (EC 3.1.1.3). The Lip2p precursor protein is processed by the KEX2-like endoprotease encoded by XPR6. Deletion of the XPR6 gene resulted in the secretion of an active but less stable proenzyme. Thus, the pro region does not inhibit lipase secretion and activity. However, it does play an essential role in the production of a stable enzyme. Processing was found to be correct in LIP2A (multiple LIP2 copy integrant)-overexpressing strains, which secreted 100 times more activity than the wild type, demonstrating that XPR6 maturation was not limiting. No extracellular lipase activity was detected with the lip2 knockout (KO) strain, strongly suggesting that extracellular lipase activity results from expression of the LIP2 gene. Nevertheless, the lip2 KO strain is still able to grow on triglycerides, suggesting an alternative pathway for triglyceride utilization in Y. lipolytica. This yeast naturally secretes several proteins, depending on the growth conditions (21). For example, if the pH is higher than 6, it secretes an alkaline extracellular protease (AEP) (33,38). Under optimal conditions, up to 1 g of AEP is secreted per liter (37). AEP is encoded by XPR2 (11,27,33). This gene codes for a 454-amino-acid (aa) prepro enzyme precursor containing a 15-aa signal sequence and a stretch of nine X-Ala or X-Pro dipeptides, followed by a 124-aa pro region that includes a glycosylation site (Asn 123 ) and a Lys 156 -Arg 157 processing site, and finally the mature form itself. The AEP precursor undergoes complex processing (27). A diaminopeptidase processes the stretch of nine dipeptides (X-Ala or X-Pro) (28,29), and the endoprotease encoded by the XPR6 gene is required to cleave the pro region, releasing the mature form (14). The pro region is involved in both the inhibition of protease activity and the folding of the propeptide into a conformation compatible with secretion, and secretion at 28°C depends on the glycosylation of the pro region (15, 28).Several enzymes are secreted by Y. lipolytica, and lipase and esterase activities have been detected and analyzed in various studies. Lipase secretion was first reported in 1948 by Peters and Nelson (41, 42), who described a single type of glucoserepressible activity. An extracellular and two cell-bound types of activity corresponding to lipase I (39 kDa) and lipase II (44 kDa) were described by Ota and coworkers (39, 47). The extracellular lipase required oleic acid as a stabilizer-activator, whereas the cell-bound lipases did not and differed in several properties from the extracellular enzyme (40). The rates of production of the extracellular and cell-bound enzymes were reported to depend on the carbon and nitrogen composition of the medium. Extracellular lipase was only detected in cultures grown with an organic nitrogen so...