The discovery of the total separation of receptor-binding and signal-generating regions of the relaxin-like factor (RLF) has provided an opportunity to investigate the mechanism of transmembrane signaling. The receptor-binding residues of RLF are in the B chain of the two-chain molecule and extend from the midregion of the central helix to the tryptophan in position B27. The signal initiation site resides in two residues before the N-terminal cysteine in each chain. For optimal signaling the RLF requires five L-α-amino acids preceding cysteine A10, whereas the B chain requires only three. The nature of the side chains of these amino acids is not critical for the signaling function. Heuristic arguments lead us to suggest that the peptide bond is the signal-generating feature of RLF and possibly of other peptide hormones.