The two human colony stimulating factors, interleukin-3 and granulocyte-macrophage colony stimulating factor, have been molecularly cloned and expressed as secreted proteins in yeast. In both cases, non-glycosylated and glycosylated forms of the molecules were produced. Removal of N-linked glycosylation sites from the genes by site-directed mutagenesis prevented addition of most of the sugar residues, but revealed a low level of residual O-linked glycosylation on a portion of the molecules. No difference in specific biological activity was found between the different forms of the proteins. It was found that a significant proportion of human granulocyte-macrophage colony stimulating factor was degraded by the yeast KEX2 protease that was cleaving after the dibasic sequence Arg-Arg at positions 23-24 of the mature protein. Site-specific mutagenesis was employed to change this sequence to Leu-Arg, and this change resulted in greatly increased expression levels of full length protein and biological activity.