Targeted, translational LacZ fusions provided the initial support for the signal sequence hypothesis in prokaryotes and allowed for selection of the mutations that identified the Sec translocon. Many of these selections relied on the fact that expression of targeted, translational lacZ fusions like malE-lacZ and lamB-lacZ42-1 causes lethal toxicity as folded LacZ jams the translocation pore. However, there is another class of targeted LacZ fusions that do not jam the translocon. These targeted, nonjamming fusions also show toxic phenotypes that may be useful for selecting mutations in genes involved in posttranslocational protein folding and targeting; however, they have not been investigated to the same extent as their jamming counterparts. In fact, it is still unclear whether LacZ can be fully translocated in these fusions. It may be that they simply partition into the inner membrane where they can no longer participate in folding or assembly. In the present study, we systematically characterize the nonjamming fusions and determine their ultimate localization. We report that LacZ can be fully translocated into the periplasm, where it is toxic. We show that this toxicity is likely due to LacZ misfolding and that, in the absence of the periplasmic disulfide bond catalyst DsbA, LacZ folds in the periplasm. Using the novel phenotype of periplasmic β-galactosidase activity, we show that the periplasmic chaperone FkpA contributes to LacZ folding in this nonnative compartment. We propose that targeted, nonjamming LacZ fusions may be used to further study folding and targeting in the periplasm of Escherichia coli.