FtsH proteins are hexameric transmembrane proteases found in chloroplasts, mitochondria and bacteria. In the protozoan Toxoplasma gondii, FtsH1 is localized to membranes of the apicoplast, a relict chloroplast present in many apicomplexan parasites. We have shown that although T. gondii FtsH1 lacks the typical bipartite targeting presequence seen on apicoplast luminal proteins, it is targeted to the apicoplast via the endoplasmic reticulum. In this report, we show that FtsH1 undergoes processing events to remove both the N- and C-termini, which are topologically separated by the membrane in which FtsH1 is embedded. Pulse-chase analysis showed that N-terminal cleavage precedes C-terminal cleavage. Unlike the processing of the N-terminal transit peptide of luminal proteins, which occurs in the apicoplast, analysis of ER-retained mutants showed that N-terminal processing of FtsH1 occurs in the endoplasmic reticulum. Two of four FtsH1 mutants bearing internal epitope tags accumulated in structures peripheral to the apicoplast, implying that FtsH1 trafficking is highly sensitive to changes in protein structure. These mutant proteins did not undergo C-terminal processing, suggesting that this processing step occurs after localization to the plastid. Mutation of the peptidase active site demonstrated that neither processing event occurs in cis. These data support a model in which multiple proteases act at different points of the trafficking pathway to form mature FtsH1, making its processing more complex than other FtsHs and unique among apicoplast proteins described thus far.