The discovery that proteins exported from the cytoplasm are typically synthesized as larger precursors with cleavable signal peptides has focused interest on the peptidases that remove the signal peptides. Here, we review the membrane-bound peptidases dedicated to the processing of protein precursors that are found in the plasma membrane of prokaryotes and the endoplasmic reticulum, the mitochondrial inner membrane, and the chloroplast thylakoidal membrane of eukaryotes. These peptidases are termed type I signal (or leader) peptidases. They share the unusual feature of being resistant to the general inhibitors of the four well-characterized peptidase classes. The eukaryotic and prokaryotic signal peptidases appear to belong to a single peptidase family. This review emphasizes the evolutionary concepts, current knowledge of the catalytic mechanism, and substrate specificity requirements of the signal peptidases.