We have identified a novel peroxisomal targeting sequence (PTS) at the extreme COOH terminus of human catalase. The last four amino acids of this protein (-KANL) are necessary and sufficient to effect targeting to peroxisomes in both human fibroblasts and Saccharomyces cerevisiae, when appended to the COOH terminus of the reporter protein, chloramphenicol acetyl transferase. However, this PTS differs from the extensive family of COOH-terminal PTS tripeptides collectively termed PTS1 in two major aspects. First, the presence of the uncharged amino acid, asparagine, at the penultimate residue of the human catalase PTS is highly unusual, in that a basic residue at this position has been previously found to be a common and critical feature of PTS1 signals. Nonetheless, this asparagine residue appears to constitute an important component of the catalase PTS, in that replacement with aspartate abolished peroxisomal targeting (as did deletion of the COOH-terminal four residues). Second, the human catalase PTS comprises more than the COOH-terminal three amino acids, in that COOH-terminal-ANL cannot functionally replace the PTS1 signal-SKL in targeting a chloramphenicol acetyl transferase fusion protein to peroxisomes. The critical nature of the fourth residue from the COOH terminus of the catalase PTS (lysine) is emphasized by the fact that substitution of this residue with a variety of other amino acids abolished or reduced peroxisomal targeting. Targeting was not reduced when this lysine was replaced with arginine, suggesting that a basic amino acid at this position is required for maximal functional activity of this PTS. In spite of these unusual features, human catalase is sorted by the PTS1 pathway, both in yeast and human cells. Disruption of the PAS10 gene encoding the S. cerevisiae PTS1 receptor resulted in a cytosolic location of chloramphenicol acetyl transferase appended with the human catalase PTS, as did expression of this protein in cells from a neonatal adrenoleukodystrophy patient specifically defective in PTS1 import. Furthermore, through the use of the two-hybrid system, it was demonstrated that both the PAS10 gene product (Pas10p) and the human PTS1 receptor can interact with the COOH-terminal region of human catalase, but that this interaction is abolished by substitutions at the penultimate residue (asparagine-to- aspartate) and at the fourth residue from the COOH terminus (lysine-to-glycine) which abolish PTS functionality. We have found no evidence of additional targeting information elsewhere in the human catalase protein. An internal tripeptide (-SHL-, which conforms to the mammalian PTS1 consensus) located nine to eleven residues from the COOH terminus has been excluded as a functional PTS. Additionally, in contrast to the situation for S. cerevisiae catalase A, which contains an internal PTS in addition to a COOH-terminal PTS1, human catalase lacks such a redundant PTS, as evidenced by the exclusive cytosolic location of human catalase mutated in the COOH-terminal PTS. Consistent with this species difference, fusions between catalase A and human catalase which include the catalase A internal PTS are targeted, at least in part, to peroxisomes regardless of whether the COOH-terminal human catalase PTS is intact.