The majority of the recombinant human insulin-like growth factor-1 (IGF1) molecules, secreted from yeast using the prepro sequence of the prepro-alpha-factor, are not active monomers but inactive, disulfide-linked dimers. The prepro sequence of the prepro-alpha-factor, usually referred to as the alpha-factor leader (alpha FL), consists of a pre or signal sequence and a proregion. After signal sequence removal during translocation into the endoplasmic reticulum (ER) the proregion is still attached to IGF1 when it folds to acquire a tertiary structure. Mature IGF1 is released only in a late Golgi compartment by the membrane-bound endoprotease Kex2p. We find that co-expression of a novel ER-retained Kex2p variant, soluble Kex2pHDEL, can prevent intermolecular disulfide bond formation between two IGF1 molecules, implying that the presence of the proregion during the folding of IGF1 in the ER could be a reason for disulfide-linked dimerisation. This result indicates that the proregion of the alpha FL may have a role in the folding of some heterologous proteins in yeast, and that the ER-retained Kex2p mutant could be used as a convenient tool to study the cellular function of the proregions present naturally in various eucaryotic precursor proteins.