Saccharomyces cerevisiae a cells secrete an extracellular protein, called "barrier" activity, that acts as an antagonist of alpha factor, the peptide mating pheromone produced by mating-type alpha cells. We report here the DNA sequence of BAR1, the structural gene for barrier activity. The deduced primary translation product of 587 amino acids has a putative signal peptide, nine potential asparagine-linked glycosylation sites, and marked sequence similarity of the first two-thirds of the protein with pepsin-like proteases. Barrier activity was abolished by in vitro mutation of an aspartic acid predicted from this sequence homology to be in the active site. Therefore, barrier protein is probably a protease that cleaves alpha factor. The sequence similarity suggests that the first two-thirds of the barrier protein is organized into two distinct structural domains like those of the pepsin-like proteases. However, the BAR1 gene product has a third carboxyl-terminal domain of unknown function; deletion of at least 166 of the 191 amino acids of this region has no significant effect on barrier activity.