Abstract: Peroxisomes perform many essential functions in eukaryotic cells. The weight of evidence indicates that these organelles divide by budding from preexisting peroxisomes. This process is not understood at the molecular level. Peroxisomal proliferation can be induced in Saccharomyces cerevisiae by oleate. This growth substrate is metabolized by peroxisomal enzymes. We have identified a protein, Pmp27, that promotes peroxisomal proliferation. This protein, previously termed Pmp24, was purified from peroxisomal membranes, and the corresponding gene, PMP27, was isolated and sequenced. Pmp27 shares sequence similarity with the Pmp30 family in Candida boidinii. Pmp27 is a hydrophobic peroxisomal membrane protein but it can be extracted by high pH, suggesting that it does not fully span the bilayer. Its expression is regulated by oleate. The function of Pmp27 was probed by observing the phenotype of strains in which the protein was eliminated by gene disruption or overproduced by expression from a multicopy plasmid. The strain containing the disruption (3B) was able to grow on all carbon sources tested, including oleate, although growth on oleate, glycerol, and acetate was slower than wild type. Strain 3B contained peroxisomes with all of the enzymes of beta-oxidation. However, in addition to the presence of a few modestly sized peroxisomes seen in a typical thin section of a cell growing on oleate-containing medium, cells of strain 3B also contained one or two very large peroxisomes. In contrast, cells in a strain in which Pmp27 was overexpressed contained an increased number of normal-sized peroxisomes. We suggest that Pmp27 promotes peroxisomal proliferation by participating in peroxisomal elongation or fission.