Propeptide processing occurs in specific compartments of the secretory path
way, but how these processing-competent organelles are generated from their
processing-incompetent precursor compartments, is unknown, To dissect the
process biochemically, we have developed a novel cell-free system reconstit
uting the production of processing-competent secretory granules in AtT-20 c
ells. Using donor membranes containing [S-35]sulfate labeled pro-opiomelano
cortin (POMC)(5) in the trans-Golgi, we can reconstitute cytosol- and ATP-d
ependent prohormone processing as well as incorporation of processed ACTH i
nto immature secretory granules, (ISGs). Under limiting cytosol conditions,
both reactions are greatly stimulated by ADP-ribosylation factor 1 (ARF1)
but not by the GDP-bound ARF1 T31N mutant. pH studies, show that lumenal ac
idification, most likely due to ARF-mediated sorting of proton pumps and le
aks during budding, confers. processing competency to the resulting organel
le. Surprisingly, comparison of onset of processing and ISG release reveals
that they are distinct biochemical processes with different kinetics and s
eparated cytosolic requirements. Moreover, ARF regulates the onset of proho
rmone processing but not ISG release. Our data suggest a two-step mechanism
(onset of processing followed by ISG release), for the production of proce
ssing-competent organelles from the trans-Golgi and provide the first syste
m with which these two steps may be individually dissected.