Pex5p, the peroxisomal protein cycling receptor, binds newly synthesized peroxisomal matrix proteins in the cytosol and promotes their translocation across the organelle membrane. During its transient passage through the membrane, Pex5p is monoubiquitinated at a conserved cysteine residue, a requisite for its subsequent ATP-dependent export back into the cytosol. Here we describe the properties of the soluble and membrane-bound monoubiquitinated Pex5p species (Ub-Pex5p). Our data suggest that 1) Ub-Pex5p is deubiquitinated by a combination of context-dependent enzymatic and nonenzymatic mechanisms; 2) soluble Ub-Pex5p retains the capacity to interact with the peroxisomal import machinery in a cargo-dependent manner; and 3) substitution of the conserved cysteine residue of Pex5p by a lysine results in a quite functional protein both in vitro and in vivo. Additionally, we show that MG132, a proteasome inhibitor, blocks the import of a peroxisomal reporter protein in vivo.