Many precursors of mitochondrial proteins are processed in two successive steps by independent matrix peptidases (MPP and MIP), whereas others are cleaved in a single step by MPP alone. To explain this dichotomy, we have constructed deletions of all or part of the octapeptide characteristic of a twice cleaved precursor (human ornithine transcarbamylase [pOTC]), have exchanged leader peptide sequences between once-cleaved (human methylmalonyl-CoA mutase [pMUT]; yeast F1ATPase beta-subunit [pF1 beta]) and twice-cleaved (pOTC; rat malate dehydrogenase (pMDH); Neurospora ubiquinol-cytochrome c reductase iron-sulfur subunit [pFe/S]) precursors, and have incubated these proteins with purified MPP and MIP. When the octapeptide of pOTC was deleted, or when the entire leader peptide of a once-cleaved precursor (pMUT or pF1 beta) was joined to the mature amino terminus of a twice-cleaved precursor (pOTC or pFe/S), no cleavage was produced by either protease. Cleavage of these constructs by MPP was restored by re-inserting as few as two amino-terminal residues of the octapeptide or of the mature amino terminus of a once-cleaved precursor. We conclude that the mature amino terminus of a twice-cleaved precursor is structurally incompatible with cleavage by MPP; such proteins have evolved octapeptides cleaved by MIP to overcome this incompatibility.