Halocyanin, a small blue copper protein, was isolated from the haloalkaliphilic archaeon Natronobacterium pharaonis. The NH2 terminus was not accessible to Edman degradation. About 70% of the amino acid sequence was determined by protein sequence analysis. The sequence information of two peptides was used for cloning and sequencing the halocyanin gene (hcy). The open reading frame codes for 489 base pairs, which account for a protein with 163 amino acids and a molecular mass of 17,223 Da. The discrepancy between this value and the molecular mass of 15,456 +/- 1.5 Da for the copper-free protein determined by electrospray mass spectrometry can be explained by a post-translational processing of the gene product. The NH2-terminal sequence of the open reading frame contains a motif that is characteristic for prokaryotic lipoproteins. Assuming a similar processing for halocyanin, Cys at position 25 of the primary transcript would be modified by a diphytanyl (glycerol)diether. Subsequently, the precursor is cleaved by a signal peptidase II-like protease and then acetylated at its NH2-terminal alpha-amino group. These modifications would yield a protein with a calculated molecular mass of 15,456 Da. A comparison of the primary structure of halocyanin with a number of other blue copper proteins places it into the plastocyanin-related group.