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The signal peptidase complex (SPC) is an essential membrane complex in the endoplasmic reticulum (ER), where it removes signal peptides (SPs) from a large variety of secretory pre-proteins with exquisite specificity. Although the determinants of this process have been established empirically, the molecular details of SP recognition and removal remain elusive. Here, we show that the human SPC exists in two functional paralogs with distinct proteolytic subunits. We determined the atomic structures of both paralogs using electron cryo-microscopy and structural proteomics. The active site is formed by a catalytic triad and abuts the ER membrane, where a transmembrane window collectively formed by all subunits locally thins the bilayer. Molecular dynamics simulations indicate that this unique architecture generates specificity for SPs based on the length of their hydrophobic segments. [Display omitted] • The human SPC has two paralogs, both of which are structurally characterized here • The SPC is a serine protease with a catalytic Ser-His-Asp triad • The c-region binding pocket is conserved to bacterial signal peptidases • Membrane thinning by the SPC measures signal peptides for length before cleavage The ER-resident signal peptidase complex (SPC) cleaves signal peptides of nascent secretory proteins and leaves transmembrane helices intact. Combining electron cryo-microscopy, mass spectrometry, and molecular dynamics simulations, Liaci et al. discover that the human SPC uses local membrane thinning and shape complementarity near the active site to generate substrate selectivity. [ABSTRACT FROM AUTHOR]