The mating pheromone a-factor secreted by Saccharomyces cerevisiae is a farnesylated and carboxylmethylated peptide and is unusually hydrophobic compared to other extracellular signaling molecules. Mature a-factor is derived from a precursor with a C-terminal CAAX motif that directs a series of posttranslational reactions, including prenylation, endoproteolysis, and carboxylmethylation. Historically, a-factor has served as a valuable model for the discovery and functional analysis of CAAX-processing enzymes. In this review, we discuss the three modules comprising the a-factor biogenesis pathway: (i) the C-terminal CAAX-processing steps carried out by Ram1/Ram2, Ste24 or Rce1, and Ste14; (ii) two sequential N-terminal cleavage steps, mediated by Ste24 and Axl1; and (iii) export by a nonclassical mechanism, mediated by the ATP binding cassette (ABC) transporter Ste6. The small size and hydrophobicity of a-factor present both challenges and advantages for biochemical analysis, as discussed here. The enzymes involved in a-factor biogenesis are conserved from yeasts to mammals. Notably, studies of the zinc metalloprotease Ste24 in S. cerevisiae led to the discovery of its mammalian homolog ZMPSTE24, which cleaves the prenylated C-terminal tail of the nuclear scaffold protein lamin A. Mutations that alter ZMPSTE24 processing of lamin A in humans cause the premature-aging disease progeria and related progeroid disorders. Intriguingly, recent evidence suggests that the entire a-factor pathway, including all three biogenesis modules, may be used to produce a prenylated, secreted signaling molecule involved in germ cell migration in Drosophila. Thus, additional prenylated signaling molecules resembling a-factor, with as-yet-unknown roles in metazoan biology, may await discovery.