A hybrid beta-galactosidase molecule containing a substantial portion of the amino-terminal sequence of the maltose-binding protein is inserted in the cytoplasmic membrane of E. coli; in this location, the protein has very low enzymatic activity. The strain producing it is, therefore, Lac-. Selection for derivatives of the fusion strain that are able to grow on lactose yields mutants in which the hybrid protein has become cytoplasmic, and thus has higher enzymatic activity. Among such derivatives, we have isolated a temperature-sensitive conditional lethal mutant that accumulates the precursor of the maltose-binding protein in the cytoplasm, and also accumulates precursors of alkaline phosphatase, lambda receptor protein and the ompF gene gene product. A number of periplasmic proteins are, however, properly localized at the nonpermissive temperature. The temperature-sensitive lesion has been genetically mapped to 2.5 min on the E. coli map, within or near a cluster of genes responsible for cell division and septation. The principle behind the genetic selection employed here should be useful in obtaining other secretion mutants to characterize the cell's secretion machinery.