Posttranslational processing of vitamin K-dependent proteins includes gamma-carboxylation of specific glutamic acid residues to form gamma-carboxyglutamic acids. To determine whether carboxylation is directed by the propeptide sequence, homologous among the precursors of these proteins, alterations were made in the Factor IX propeptide cDNA. The extent of gamma-carboxylation of recombinant Factor IX was assessed using conformation-specific antibodies directed against the gamma-carboxyglutamic acid-dependent, metal-stabilized structure. Deletion of the propeptide (residues -18 to -1) abolished carboxylation, but not secretion, of Factor IX. Substitution of alanine for phenylalanine -16 or glutamic acid for alanine -10 also impaired carboxylation. These results indicate that the Factor IX propeptide participates in defining a recognition site that designates an adjacent glutamic acid-rich domain for gamma-carboxylation. The association of the propeptide with the gamma-carboxylation recognition site provides the first demonstration of a specific function served by a propeptide in posttranslational protein processing.