Although sterol carrier protein-2 (SCP-2) is encoded as a precursor protein (proSCP-2), little is known regarding the structure and function of the 20-amino acid N-terminal presequence. As shown herein, the presequence contains significant secondary structure and alters SCP-2: (i) secondary structure (CD), (ii) tertiary structure (aqueous exposure of Trp shown by UV absorbance, fluorescence, and fluorescence quenching), (iii) ligand binding site [Trp response to ligands, peptide cross-linked by photoactivatable free cholesterol (FCBP)], (iv) selectivity for interaction with anionic phospholipid-rich membranes, (v) interaction with a peroxisomal import protein [FRET studies of Pex5p(C) binding], the N-terminal presequence increased SCP-2's affinity for Pex5p(C) by 10-fold, and (vi) intracellular targeting in living and fixed cells (confocal microscopy). Nearly 5-fold more SCP-2 than proSCP-2 colocalized with plasma membrane lipid rafts and caveolae (AF488-CTB); 2.8-fold more SCP-2 than proSCP-2 colocalized with a mitochondrial marker (Mitotracker), but nearly 2-fold less SCP-2 than proSCP-2 colocalized with peroxisomes (AF488 antibody to PMP70). These data indicate the importance of the N-terminal presequence in regulating SCP-2 structure, cholesterol localization within the ligand binding site, membrane association, and, potentially, intracellular targeting.