Secretory proteins and most membrane proteins are synthesized with a signal sequence that is usually cleaved from the nascent polypeptide during transport into the lumen of the endoplasmic reticulum. Using site-specific photo-crosslinking we have followed the fate of the signal sequence of preprolactin in a cell-free system. This signal sequence has an unusually long hydrophilic n-region containing several positively charged amino acid residues. We found that after cleavage by signal peptidase the signal sequence is in contact with lipids and subunits of the signal peptidase complex. The cleaved signal sequence is processed further and an N-terminal fragment is released into the cytosol. This signal peptide fragment was found to interact efficiently with calmodulin. Similar to preprolactin, the signal sequence of the HIV-1 envelope protein p-gp160 has the characteristic feature for calmodulin binding in its n-region. We found that a signal peptide fragment of p-gp160 was released into the cytosol and interacts with calmodulin. Our results suggest that signal peptide fragments of some cellular and viral proteins can interact with cytosolic target molecules. The functional consequences of such interactions remain to be established. However, our data suggest that signal sequences may be functionally more versatile than anticipated up to now.