Final answer:
The cleavage of the translated polypeptide to form mature insulin occurs in the endomembrane system, particularly within the rough endoplasmic reticulum (RER) where modification and packaging of proteins for secretion takes place.
Step-by-step explanation:
During the production of insulin, the translated polypeptide is cleaved into the mature form of insulin and secreted from the cell. The cleavage most likely takes place in the endomembrane system. Specifically, this process occurs within the organelles of the endomembrane system responsible for protein processing and trafficking, which includes the rough endoplasmic reticulum (RER), where proteins are synthesized, modified, and packaged for secretion. Insulin is initially synthesized as preproinsulin, which subsequently gets converted into proinsulin after the removal of a signal sequence. Proinsulin then has its 'C' chain cleaved off by proteolytic enzymes in the RER to form active insulin, ready for secretion from the cell.