The majority of the recombinant human insulin-like growth factor-1 (IGF1) molecules, secreted from yeast using the prepro sequence of the prepro-α-factor, are not active monomers but inactive, disulfide-linked dimers. The prepro sequence of the prepro-α-factor, usually referred to as the α-factor leader (αFL), 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 Kex-2p 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 αFL 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.