Guanylin is a guanylyl cyclase (GC)-activating peptide that is mainly secreted as the corresponding prohormone of 94 amino acid residues. In this study, we show that the originally isolated 15-residue guanylin, representing the COOH-terminal part of the prohormone, is released from the prohormone by cleavage of an Asp-Pro amide bond under conditions applied during the isolation procedures. Thus, the 15-residue guanylin is probably a non-native, chemically induced GC-activating peptide. This guanylin molecule contains two disulfide bonds that are absolutely necessary for receptor activation. We demonstrate that the folding of the reduced 15-residue guanylin results almost completely in the formation of the two inactive disulfide isomers. In contrast, the reduced form of proguanylin containing the entire prosequence folds to a product with the native cysteine connectivity. Because proguanylin lacking the 31 NH2-terminal residues of the prosequence folds only to a minor extent to guanylin with the native disulfide bonds, it is evident that this NH2-terminal region contributes significantly to the correct disulfide-coupled folding. Structural studies using CD and NMR spectroscopy show that native proguanylin contains a considerable amount of α-helical and, to a lesser extent, β-sheet structural elements. In addition, a close proximity of the NH2- and the COOH-terminal regions was found by NOESY. It appears that this interaction is important for the constitution of the correct conformation and provides an explanation of the minor guanylyl cyclase activity of proguanylin by shielding the bioactive COOH-terminal domain from the receptor.