Processing of precursor proteins by the proprotein convertases is thought to occur mainly in the trans-Golgi network or post-Golgi compartments. Such cleavage is inhibited by the prosegment of the convertases. During our studies of the use of the inhibitory prosegment of PC1, we noticed that a construct containing the prosegment fused to the C-terminal secretory granule sorting domain was cleaved in the endoplasmic reticulum (ER) at a pair of basic residues, best recognized by furin and PC7. This was further confirmed when this construct was fused at the C-terminus with a KDEL ER-retention signal. This suggests that the convertases could cleave some substrates within the ER, possibly by displacing the inhibitory prosegment associated with them.