We found recently that beta-lactamase folds in the yeast cytosol to a native-like, catalytically active, and trypsin-resistant conformation, and is thereafter translocated into the ER and secreted to the medium. Previously, it was thought that pre-folded proteins cannot be translocated. Here we have studied in living yeast cells whether beta-lactamase, a tight globule in authentic form, must be unfolded for ER translocation. A beta-lactamase mutant (E166A) binds irreversibly benzylpenicillin via Ser(70) in the active site. We fused E166A to the C terminus of a yeast-derived polypeptide having a post-translational signal peptide. In the presence of benzylpenicillin, the E166A fusion protein was not translocated into the endoplasmic reticulum, whereas translocation of the unmutated variant was not affected. The benzylpenicillin-bound protein adhered to the endoplasmic reticulum membrane, where it prevented translocation of BiP, carboxypeptidase Y, and secretory proteins. Although the 321-amino acid-long N-terminal fusion partner adopts no regular secondary structure and should have no constraints for pore penetration, the benzylpenicillin-bound protein remained fully exposed to the cytosol, maintaining its signal peptide. Our data suggest that the beta-lactamase portion must unfold for translocation, that the unfolding machinery is cytosolic, and that unfolding of the remote C-terminal beta-lactamase is required for initiation of pore penetration.