Four components of the apparatus of extracellular protein secretion of Pseudomonas aeruginosa, Xcpt, -U, -V, and -W (XcpT-W), are synthesized as precursors with short N-terminal leader peptides that share sequence similarity with the pilin subunit of this organism. A specialized leader peptidase/methylase, product of the pilD gene, has been shown to cleave the leader peptide from prepilin and to methylate the N-terminal phenylalanine of the mature pilin. Antibodies were prepared against XcpT-W and used to purify each of these proteins. Sequence analysis of XcpT-W has shown that these proteins, like mature pilin, contain N-methylphenylalanine as the N-terminal amino acid. Analysis of cellular fractions from wild-type and pilD mutant strains of P. aeruginosa showed that the precursor forms of XcpT-W are located predominantly in the bacterial inner membrane, and their localization is not altered after PilD-mediated removal of the leader sequence. These studies demonstrate that the biogenesis of the apparatus of extracellular protein secretion and that of type IV pili share a requirement for PilD. This bifunctional enzyme, acting in the inner membrane, cleaves the leader peptides from precursors of pilins and XcpT-W and subsequently methylates the amino group of the N-terminal phenylalanine of each of its substrates.