Protein disulfide isomerase (PDI) is an abundant protein of the endoplasmic reticulum that catalyzes the oxidation of protein sulfhydryl groups and the isomerization and reduction of protein disulfide bonds. Saccharomyces cerevisiae cells lacking PDI are inviable. PDI is a component of many different protein processing complexes, and the actual activity of PDI that is required for cell viability is unclear. A cDNA that codes for rat PDI fused to the alpha-factor pre-pro segment was expressed in a protease-deficient strain of S. cerevisiae under the control of an ADH2-GAPDH hybrid promoter. The cells processed the resulting protein and secreted it into the medium as a monomer, despite having a KDEL or HDEL sequence at its C-terminus. The typical yield of isolated protein was 2 mg per liter of culture. The catalytic activity of the PDI from S. cerevisiae was indistinguishable from that of PDI isolated from bovine liver. This expression system is unique in allowing the same plasmid to be used both to complement pdi1 delta S. cerevisiae and to produce PDI for detailed in vitro analyses. Correlations of the in vivo behavior and in vitro properties of PDI are likely to reveal structure-function relationships of biological importance.