Previous studies on lipopigment isolated from sheep affected with ceroid lipofuscinosis (Batten's disease) showed that the disease is a lysosomal proteinosis, involving specific storage of peptide(s) that migrate in dodecyl sulfate-polyacrylamide gel electrophoresis with an apparent Mr of 3500. This band is the dominant contributor to the lipopigment mass. When purified total lipopigment proteins were loaded onto a protein sequencer, a dominant sequence was found, identical to the NH2 terminus of the lipid-binding subunit of protein translocating mitochondrial ATP synthase. This sequence was determined to 40 residues and a minimum estimate of 40% made for its contribution to the lipopigment protein mass. The full lipid-binding subunit has physical and chemical properties similar to those of the specifically stored low Mr peptide, which may be the full protein or a large NH2-terminal fragment of it. Lipopigments in the human ceroid lipofuscinoses also contain a major component with similar physical and chemical properties. These and previous results indicate that the genetic lesion in ovine ceroid lipofuscinosis causes an abnormal accumulation of this peptide in lysosomes, i.e. the disease is a proteolipid proteinosis, specifically a lysosomal mitochondrial ATP synthase lipid-binding subunit proteinosis. The analogous human diseases are likely to reflect storage of the same or similar peptides.