The distribution of some enzymes between peroxisomes and cytosol, or a dual localization in both these compartments, can be difficult to reconcile. We have used photobleaching in live cells expressing green fluorescent protein (GFP)-fusion proteins to show that imported bona fide peroxisomal matrix proteins are retained in the peroxisome. The high mobility of the GFP-fusion proteins in the cytosol and absence of peroxisomal escape makes it possible to eliminate the cytosolic fluorescence by photobleaching, to distinguish between exclusively cytosolic proteins and proteins that are also present at low levels in peroxisomes. Using this technique we found that GFP tagged bile acid-CoA:amino acid N-acyltransferase (BAAT) was exclusively localized in the cytosol in HeLa cells. We conclude that the cytosolic localization was due to its carboxyterminal non-consensus peroxisomal targeting signal (-SQL) since mutation of the -SQL to -SKL resulted in BAAT being efficiently imported into peroxisomes.