We have sequenced the nucleotides of the gene POX18 that encodes PXP-18, a major peroxisomal polypeptide inducible by oleic acid in the yeast Candida tropicalis. POX18 had a single open reading frame of 127 amino acids. Some 33% of the amino acid sequence of the predicted basic polypeptide (13805 Da), was identical to that of the nonspecific lipid-transfer protein (sterol carrier protein 2) from rat liver. PXP-18, purified to near homogeneity from isolated peroxisomes, had an amino-terminal sequence identical to that of the predicted polypeptide except for the initiator methionine, and had nonspecific lipid-transfer activity comparable to that of its mammalian equivalents. Unexpectedly, PXP-18 lacked the cysteine residue thought to be essential for the activity of this protein in mammals. RNA blot analysis showed that the POX18 gene was expressed exclusively in cells grown on oleic acid, suggesting that PXP-18 has a role in the /I-oxidation of long-chain fatty acids. PXP-18 modulated acylcoenzyme A oxidase activity at low pH.Peroxisomal proteins are synthesized on free polysomes and imported post-translationally into the organelle, but most of them have no cleavable targeting (topogenic) sequence at the amino-terminus (for review, see [l]). The targeting sequences of five peroxisomal proteins from higher eucaryotes have been found at the carboxy-terminus and shown to contain a tripeptide, Ser-Lys/His-Leu, at or near the end of the sequence [2 -41. We have cloned genes encoding peroxisomal proteins of the yeast Candida tropicalis [5] and sequenced three genes for the subunits (PXP-2, PXP-4 and PXP-5) of acylCoA oxidase isozymes [6, 71 and the gene for catalase (PXP-9) [8]. None of the polypeptides encoded by these genes has the Ser-Lys/His-Leu sequence in their carboxy-terminal regions. The targeting information of PXP-4, which has a molecular mass of 78554 Da, was found in various locations by both in vitro [9] and in vivo [lo] experiments. Thus, the entire protein molecule must be systematically analysed if the yeast peroxisomal targeting sequence is to be identified. Since a small protein is more convenient for this purpose, we chose a 16-kDa protein, PXP-18, which is encoded by the gene POX18 and induced markedly by oleic acid [5]. Its function is not known.