We report on the rerouting of peroxisomal alcohol oxidase (AO) to the secretory pathway of Hansenula polymorpha. Using the leader sequence of the Saccharomyces cerevisiae mating factor alpha (MFalpha) as sorting signal, AO was correctly sorted to the endoplasmic reticulum (ER), which strongly proliferated in these cells. The MFalpha presequence, but not the prosequence, was cleaved from the protein. AO protein was present in the ER as monomers that lacked FAD, and hence was enzymatically inactive. Furthermore, the recombinant AO protein was subject to gradual degradation, possibly because the protein did not fold properly. However, when the S. cerevisiae invertase signal sequence (ISS) was used, secretion of AO protein was observed in conjunction with bulk of the protein being localized to the ER. The amount of secreted AO protein increased with increasing copy numbers of the AO expression cassette integrated into the genome. The secreted AO protein was correctly processed and displayed enzyme activity.