Extracellular Phr pentapeptides produced by gram-positive, spore-forming bacteria regulate processes during the transition from exponential- to stationary-phase growth. Phr pentapeptides are produced by cleavage of their precursor proteins. We determined the residues that direct this cleavage for the Bacillus subtilis Phr peptide, CSF, which is derived from the C terminus of PhrC. Strains expressing PhrC with substitutions in residues -1 to -5 relative to the cleavage site had a defect in CSF production. The mutant PhrC proteins retained a functional signal sequence for secretion, as assessed by secretion of PhrC-PhoA fusions. To determine whether the substitutions directly affected cleavage of PhrC to CSF, we tested cleavage of synthetic pro-CSF peptides that corresponded to the C terminus of PhrC and had an amino acid substitution at the -2, -3, or -4 position. The mutant pro-CSF peptides were cleaved less efficiently to CSF than the wild-type pro-CSF peptide whether they were incubated with whole cells, cell wall material, or the processing protease subtilisin or Vpr. To further define the range of amino acids that support CSF production, the amino acid at the -4 position of PhrC was replaced by the 19 canonical amino acids. Only four substitutions resulted in a >2-fold defect in CSF production, indicating that this position is relatively immune to mutational perturbations. These data revealed residues that direct cleavage of CSF and laid the groundwork for testing whether other Phr peptides are processed in a similar manner.