2-Methylacyl-CoA racemase is an auxiliary enzyme required for the peroxisomal beta-oxidative breakdown of (2R)-pristanic acid and the (25R)-isomer of C(27) bile acid intermediates. The enzyme activity is found not only in peroxisomes but also is present in mitochondria of human liver and fibroblasts. The C terminus of the human racemase, a protein of 382 amino acids with a molecular mass of 43,304 daltons as deduced from its cloned cDNA, consists of KASL. Hitherto this sequence has not been recognized as a peroxisomal targeting signal (PTS1). From the in vitro interaction between recombinant racemase and recombinant human PTS1 receptor (Pex5p), and the peroxisomal localization of green fluorescent protein (GFP) fused to the N terminus of full-length racemase or its last six amino acids in tranfected Chinese hamster ovary (CHO) cells, we concluded that ASL is a new PTS1 variant. To be recognized by Pex5p, however, the preceding lysine residue is critical. As shown in another series of transfection experiments with GFP fused to the C terminus of the full-length racemase or racemase with deletions of the N terminus, mitochondrial targeting information is localized between amino acids 22 and 85.Hence, our data show that a single transcript gives rise to a racemase protein containing two topogenic signals, explaining the dual cellular localization of the activity.