Microsomal forms of eukaryotic cytochrome P450 proteins are integral membrane proteins of the endoplasmic reticulum (ER) membrane which are targeted to the ER via the signal recognition particle pathway. A hydrophobic amino terminus serves as a combined signal sequence and major membrane anchor (signal-anchor sequence) for the microsomal P450s. We have examined the insertion of bovine 17 alpha-hydroxylase (P45017 alpha) into the ER of COS 1 cells in order to evaluate the role of membrane insertion of the amino-terminal signal-anchor of microsomal P450s as a functional determinant for these enzymes. Previously, we have shown that deletion of the hydrophobic amino terminus from P45017 alpha reduced membrane targeting and insertion by 5-fold compared with the wild-type protein, abolished enzymatic activity, and resulted in an aberrant CO difference spectrum. In the present study we have replaced the amino terminus of P45017 alpha with two heterologous signal-anchor sequences, one that is similar and one that is very different from the P45017 alpha sequence. The chimeric proteins were expressed in COS 1 cells. Immunoblot analysis of isolated microsomal membranes show that the heterologous signal-anchor sequences functioned to target the P45017 alpha protein to the ER. Enzymatic assays in intact COS 1 cells indicate that both the chimeric proteins are efficient 17 alpha-hydroxylase enzymes. The amino terminus of P45017 alpha was also replaced with a sequence that is not a signal-anchor, and the expressed protein was neither targeted to the ER nor was functional in COS 1 cells. In conclusion, both the structure and catalytic activity of P45017 alpha in COS 1 cells is dependent upon an amino-terminal sequence that functions as a signal-anchor sequence and not upon the precise sequence of the amino terminus.