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In-vitro translation of anglerfish islet mRNA revealed three glucagon precursors (preproglucagons): one with M_r 16 000 and two with M_r 14 000. The two M_r 14 000 precursors were well separated upon isoelectric focusing gels (pI values of 7·2 and 7·3), but had identical peptide maps. Translation of hybrid-selected M_r 14 000 preproglucagon mRNA in the presence of microsomal vesicles revealed that both precursors were processed to the same proglucagon. Northern blot analysis detected two mRNA species encoding M_r 14 000 precursor. A full-length M_r 14 000 preproglucagon cDNA was subcloned into a transcription vector, and coupled in-vitro transcription—translation was performed; surprisingly, both M_r 14 000 precursors were synthesized. To test whether acetylation of the free amino terminus generated the more acidic precursor, acetylase activity was partially inactivated with the inhibitor S-acetonyl-CoA, and acetyl-CoA was depleted by addition of oxaloacetate and citrate synthetase. Under these conditions, the level of the most basic preproglucagon was greatly enhanced, but when exogenous acetyl-CoA was added, the acidic form predominated. We conclude that acetylation generates the acidic precursor, and we discuss the implications of our findings for the biogenesis of other peptide hormones.