Sterol regulatory element-binding proteins (SREBPs) are central regulators of cellular lipid synthesis and homeostasis. Mammalian SREBPs are proteolytically activated and liberated from the membrane by Golgi Site-1 and Site-2 proteases. Fission yeast SREBPs, Sre1 and Sre2, employ a different mechanism that genetically requires the Golgi Dsc E3 ligase complex for cleavage activation. Here, we established Sre2 as a model to define structural requirements for SREBP cleavage. We showed that Sre2 cleavage does not require the N-terminal basic helix-loop-helix zipper transcription factor domain, thus separating cleavage of Sre2 from its transcription factor function. From a mutagenesis screen of 94 C-terminal residues of Sre2, we isolated 15 residues required for cleavage and further identified a glycine-leucine sequence required for Sre2 cleavage. Importantly, the glycine-leucine sequence is located at a conserved distance before the first transmembrane segment of both Sre1 and Sre2 and cleavage occurs in between this sequence and the membrane. Bioinformatic analysis revealed a broad conservation of this novel glycine-leucine motif in SREBP homologs of ascomycete fungi, including the opportunistic human pathogen Aspergillus fumigatus where SREBP is required for virulence. Consistent with this, the sequence was also required for cleavage of the oxygen-responsive transcription factor Sre1 and adaptation to hypoxia, demonstrating functional conservation of this cleavage recognition motif. These cleavage mutants will aid identification of the fungal SREBP protease and facilitate functional dissection of the Dsc E3 ligase required for SREBP activation and fungal pathogenesis. 