ATF6 is an endoplasmic reticulum (ER) membrane-anchored transcription factor activated by regulated intramembrane proteolysis in the ER stress response. The release of the cytosolic transcription factor domain of ATF6 requires the sequential processing by the Golgi site-1 and site-2 proteases (S1P and S2P). It has been unclear why S2P proteolysis relies on previous site-1 cleavage. One possibility is that S2P localizes to a different cellular compartment than S1P; however, here we show that S2P localizes to the same compartment as S1P, the cis/medial-Golgi. In addition, we have re-localized S1P and S2P to the ER with brefeldin A and find that the sequential cleavage of ATF6 is reconstituted in the ER. The mapping of the region of ATF6 required for sequential S1P and S2P cleavage showed that short luminal domains resulted in S1P-independent S2P cleavage. The addition of artificial domains onto these short ATF6 luminal domains restored the S1P dependence of S2P cleavage, suggesting that it is the size rather than specific sequences in the luminal domain that determines the S1P dependence of S2P cleavage. These results suggest that the bulky ATF6 luminal domain blocks S2P cleavage and that the role of S1P is to reduce the size of the luminal domain to prepare ATF6 to be an optimal S2P substrate.