Most secreted and many membrane proteins contain cleavable N-terminal signal sequences that mediate their targeting to and translocation across the endoplasmic reticulum or bacterial cytoplasmic membrane. Recent studies have identified many exceptions to the widely held view that signal sequences are simple, degenerate and interchangeable. Growing evidence indicates that signal sequences contain information that specifies the choice of targeting pathway, the efficiency of translocation, the timing of cleavage and even postcleavage functions. As a consequence, signal sequences can have important roles in modulating protein biogenesis. Based on a synthesis of studies in numerous experimental systems, we propose that substrate-specific sequence elements embedded in a conserved domain structure impart unique and physiologically important functionality to signal sequences.