Recent studies have indicated that FtsY, the signal recognition particle receptor of Escherichia coli, plays a central role in membrane protein biogenesis. For proper function, FtsY must be targeted to the membrane, but its membrane-targeting pathway is unknown. We investigated the relationship between targeting and function of FtsY in vivo, by separating its catalytic domain (NG) from its putative targeting domain (A) by three means: expression of split ftsY, insertion of various spacers between A and NG, and separation of A and NG by in vivo proteolysis. Proteolytic separation of A and NG does not abolish function, whereas separation by long linkers or expression of split ftsY is detrimental. We propose that proteolytic cleavage of FtsY occurs after completion of co-translational targeting and assembly of NG. In contrast, separation by other means may interrupt proper synchronization of co-translational targeting and membrane assembly of NG. The co-translational interaction of FtsY with the membrane was confirmed by in vitro experiments.