A previous report dealt with the cloning in Escherichia coli and sequencing of both the cDNA and genomic DNA encoding a highly active xylanase (XynA) of Aureobasidium pullulans (X.-L. Li and L. G. Ljungdahl, Appl. Environ. Microbiol. 60:3160-3166, 1994). Now we show that the gene was expressed in Saccharomyces cerevisiae under the GAL1 promoter in pYES2 and that its product was secreted into the culture medium. S. cerevisiae clone pCE4 with the whole open reading frame of xynA, including the part coding for the signal peptide, had xylanase activity levels of 6.7 U ml-1 in the cell-associated fraction and 26.2 U ml-1 in the culture medium 4 h after galactose induction. Two protein bands with sizes of 25 and 27 kDa and N-terminal amino acid sequences identical to that of APX-II accounted for 82% of the total proteins in the culture medium of pCE4. These proteins were recognized by anti-APX-II antibody. The results suggest that the XynA signal peptide supported the posttranslational processing of xynA product and the efficient secretion of the active xylanase from S. cerevisiae. Clones pCE3 and pGE3 with inserts of cDNA and genomic DNA, respectively, containing only the mature enzyme region attached by a Met codon had low levels of xylanase activity in the cell-associated fractions (1.6 U ml-1) but no activity in the culture media. No xylanase activity was detected in clone pGE4, which was the same as pCE4, except that pGE4 had a 59-bp intron in the signal peptide region. A comparison of the A. pullulans and S. cerevisiae signal peptides demonstrated that the XynA signal peptide was at least three times more efficient than those of S. cerevisiae invertase or mating alpha-factor pheromone in secreting the heterologous xylanase from S. cerevisiae cells.