The bacteriocin pediocin PA-1 operon of Pediococcus acidilactici PAC1.0 encompasses four genes: pedA, pedB, pedC and pedD. Transcription of the operon results in the formation of two overlapping transcripts, probably originating from a single promoter upstream of pedA. The major transcript comprises pedA, pedB, and pedC, while a minor transcript encompasses all of these genes and pedD. By deletion analysis and overexpression of pedB in Pediococcus pentosaceus we demonstrate that this gene encodes the pediocin PA-1 immunity protein. Prepediocin is active in Escherichia coli and when pedA was expressed concomitantly with pedD both the precursor and the mature form of pediocin were observed intracellularly. Extracellular pediocin was only detected if both pedC and pedD were present. The N-terminal domains of PedD and a subgroup of bacteriocin ABC-transporters are conserved. Expression of only this domain of PedD in cells producing prepediocin was sufficient for prepediocin processing. From these results we conclude that both PedC and PedD are essential for pediocin transport, and that PedD is capable of processing prepediocin.