Leader peptidase cleaves the amino-terminal leader sequences of many secreted and membrane proteins. We have examined the function of leader peptidase by constructing an Escherichia coli strain where its synthesis is controlled by the arabinose B promoter. This strain requires arabinose for growth. When the synthesis of leader peptidase is repressed, protein precursors accumulate, including the precursors of M13 coat protein (an inner membrane protein), maltose binding protein (a periplasmic protein), and OmpA protein (an outer membrane protein). These precursors are translocated across the plasma membrane, as judged by their sensitivity to added proteinase K. However, pro-OmpA and pre-maltose binding protein are retained at the outer surface of the inner membrane. Thus, leader peptides anchor translocated pre-proteins to the outer surface of the plasma membrane and must be removed to allow their subsequent release into the periplasm or transit to the outer membrane.