Introduction The islet cell hormones are synthesized initially as parts of larger precursors, the genes for which have been described in Chapters 1, 4, 5, and 6. The primary translation products contain signals for biochemical modifications, proteolysis and derivatization, and signals for proper cellular handling. Based on this, the peptide is excised from the precursor and modified to the biologically active form. At the same time, the precursor is targeted to vesicles in the regulated export route of the cell, from which the activated peptide is eventually released. Previously, most attention was directed towards the biochemical part of the peptide activation, mainly the proteolytic cleavage of the precursor. However, the biochemical processing is intimately connected to cell biological events, as the different steps in the precursor modification occur in specific compartments of the cell with distinct biochemical compositions. Thus, the precursor will only be properly processed and derivatized if it is translocated and further targeted correctly in the secretory pathway of the cell. The whole field of peptide precursor processing was founded in 1967 when Steiner discovered that insulin was synthesized as part of a larger precursor (Steiner & Oyer, 1967; Steiner et al, 1967). He subsequently delineated a processing mechanism (Nolan et al., 1971; Steiner et al, 1974) which since has proved to be of truly general importance not only for the activation of peptide hormones but also for neuropeptides, paracrine peptide messengers, pheromones, growth factors, etc. Five to ten years ago the structure of the precursors for the islet hormones had been characterized by deduction from the cloned cDNA. At the same time metabolic labeling studies had clarified most of the processing patterns for the individual precursors.