Fractionation of MOPC 41 DL-1 tumors revealed that the mRNA for the light chain of immunoglobulin is localized exclusively in membrane- bound ribosomes. It was shown that the translation product of isolated light chain mRNA in a heterologous protein-synthesizing system in vitro is larger than the authentic secreted light chain; this confirms similar results from several laboratories. The synthesis in vitro of a precursor protein of the light chain is not an artifact of translation in a heterologous system, because it was shown that detached polysomes, isolated from detergent-treated rough microsomes, not only contain nascent light chains which have already been proteolytically processed in vivo but also contain unprocessed nascent light chains. In vitro completion of these nascent light chains thus resulted in the synthesis of some chains having the same mol wt as the authentic secreted light chains, because of completion of in vivo proteolytically processed chains and of other chains which, due to the completion of unprocessed chains, have the same mol wt as the precursor of the light chain. In contrast, completion of the nascent light chains contained in rough microsomes resulted in the synthesis of only processed light chains. Taken together, these results indicate that the processing activity is present in isolated rough microsomes, that it is localized in the membrane moiety of rough microsomes, and, therefore, that it was most likely solubilized during detergent treatment used for the isolation of detached polysomes. Furthermore, these results established that processing in vivo takes place before completion of the nascent chain. The data also indicate that in vitro processing of nascent chains by rough microsomes is dependent on ribosome binding to the membrane. If the latter process is interfered with by aurintricarboxylic acid, rough microsomes also synthesize some unprocessed chains. The data presented in this paper have been interpreted in the light of a recently proposed hypothesis. This hypothesis, referred to as the signal hypothesis, is described in greater detail in the Discussion section.