The presenilin-type aspartic protease signal peptide peptidase (SPP) can cleave signal peptides within their transmembrane region. SPP is essential for generation of signal peptide-derived HLA-E epitopes in humans and is exploited by Hepatitis C virus for processing of the viral polyprotein. Here we analyzed requirements of substrates for intramembrane cleavage by SPP. Comparing signal peptides that are substrates with those that are not revealed that helix-breaking residues within the transmembrane region are required for cleavage, and flanking regions can affect processing. Furthermore, signal peptides have to be liberated from the precursor protein by cleavage with signal peptidase in order to become substrates for SPP. We propose that signal peptides require flexibility in the lipid bilayer to exhibit an accessible peptide bond for intramembrane proteolysis.