Vitamin K-dependent gamma-glutamyl carboxylase catalyzes the conversion of glutamyl residues to gamma-carboxyglutamate. Its substrates include vertebrate proteins involved in blood coagulation, bone mineralization, and signal transduction and invertebrate ion channel blockers known as conotoxins. Substrate recognition involves a recognition element, the gamma-carboxylation recognition site, typically located within a cleavable propeptide preceding the targeted glutamyl residues. We have purified two novel gamma-carboxyglutamate-containing conotoxins, Gla-TxX and Gla-TxXI, from the venom of Conus textile. Their cDNA-deduced precursors have a signal peptide but no apparent propeptide. Instead, they contain a C-terminal extension that directs gamma-carboxylation but is not found on the mature conotoxin. A synthetic 13-residue "postpeptide" from the Gla-TxXI precursor reduced the K(m) for the reaction of the Conus gamma-carboxylase with peptide substrates, including FLEEL and conantokin-G, by up to 440-fold, regardless of whether it was positioned at the N- or C-terminal end of the mature toxin. Comparison of the postpeptides to propeptides from other conotoxins suggested some common elements, and amino acid substitutions of these residues perturbed gamma-carboxylation of the Gla-TxXI peptide. The demonstration of a functional and transferable C-terminal postpeptide in these conotoxins indicates the presence of the gamma-carboxylation recognition site within the postpeptide and defines a novel precursor structure for vitamin K-dependent polypeptides. It also provides the first formal evidence to prove that gamma-carboxylation occurs as a post-translational rather than a cotranslational process.