SRP54, a component of the signal recognition particle (SRP), recognizes the signal peptide of secretory proteins and interacts with the signal recognition particle receptor to target the ribosome and the associated nascent chain to the endoplasmic reticulum. By functional analysis showed that SRP54 binds to SRP RNA via the M-domain, but only in the presence of RNA-bound SRP19, and that it associates with the signal peptide of nascent polypeptide chains. RNA interaction requires the presence of a loop in the C-terminal M-domain. Signal peptide recognition most likely involves methionine-rich loops. During signal peptide recognition, SRP54 is positioned at the exit site close to ribosomal proteins L23a (602326) and L35. When SRP54 contacts the signal recognition particle receptor (182180), SRP54 is rearranged such that it is no longer close to L23a. This repositioning may allow the translocon to dock with the ribosome, leading to insertion of the signal peptide into the translocation channel.