Microsporidia are intracellular parasites that infect a variety of animals, including humans. As highly specialized parasites, they are characterized by a number of unusual adaptations, many of which are manifested as extreme reduction at the molecular, biochemical, and cellular levels. One interesting aspect of reduction is the mitochondrion. Microsporidia were long considered to be amitochondriate, but recently a tiny mitochondrion-derived organelle called the mitosome was detected. The molecular function of this organelle remains poorly understood. The mitosome has no genome, so it must import all its proteins from the cytosol. In other fungi, the mitochondrial protein import machinery consists of a network series of heterooligomeric translocases and peptidases, but in microsporidia, only a few subunits of some of these complexes have been identified to date. Here, we look at targeting sequences of the microsporidian mitosomal import system and show that mitosomes do in some cases still use N-terminal and internal targeting sequences that are recognizable by import systems of mitochondria in yeast. Furthermore, we have examined the function of the inner membrane peptidase processing enzyme and demonstrate that mitosomal substrates of this enzyme are processed to mature proteins in one species with a simplified processing complex, Antonospora locustae. However, in Encephalitozoon cuniculi, the processing complex is lost altogether, and the preprotein substrate functions with the targeting leader still attached. This report provides direct evidence for presequencing processing in mitosomes and also shows how a complex molecular system has continued to degenerate throughout the evolution of microsporidia.