The lipase (lip) gene of Staphylococcus hyicus was used to study the expression of the Escherichia coli beta-lactamase (bla) gene in S. carnosus. The bla gene, devoid of its promotor and most of the signal sequence, was fused to the lip structural gene at various positions. A set of 11 secretion vectors (pLL beta 1 to pLL beta 11) was isolated and analysed. All secretion vectors caused beta-lactamase production and activity in S. carnosus. However, the amount of hybrid proteins secreted was influenced by the length of the NH2-terminal lipase portion. An increased concentration, comparable to that of the native lipase, of secreted lipase/beta-lactamase hybrid proteins was only found when the lipase portion of the construct comprised more than 101 amino acids of the NH2-terminal region of the lipase preprotein; the proposed lipase signal peptide is 36 amino acids long. If the hybrid proteins constructed contained 101 or less amino acids of the NH2-terminal lipase preprotein, only low amounts of secreted hybrid proteins were detectable and a significant portion of the hybrid proteins and beta-lactamase activity was found in the cellular fraction. The results indicate that the lipase possesses adjacent to the signal peptide a peptide domain that is essential for the secretion of the lipase/beta-lactamase hybrid proteins.