We report here the crystallographic and biophysical analysis of a soluble, catalytically active fragment of the Escherichia coli type I signal peptidase (SPase ⌬2-75) in complex with arylomycin A 2 . The 2.5-Å resolution structure revealed that the inhibitor is positioned with its COOH-terminal carboxylate oxygen (O45) within hydrogen bonding distance of all the functional groups in the catalytic center of the enzyme (Ser 90 O-␥, Lys 145 N-, and Ser 88 O-␥) and that it makes ␤-sheet type interactions with the ␤-strands that line each side of the binding site. Ligand binding studies, calorimetry, fluorescence spectroscopy, and stopped-flow kinetics were also used to analyze the binding mode of this unique non-covalently bound inhibitor. The crystal structure was solved in the space group P4 3 2 1 2. A detailed comparison is made to the previously published acyl-enzyme inhibitor complex structure (space group: P2 1 2 1 2) and the apo-enzyme structure (space group: P4 1 2 1 2). Together this work provides insights into the binding of pre-protein substrates to signal peptidase and will prove helpful in the development of novel antibiotics.Type I signal (leader) peptidase (SPase, 1 EC 3.4.21.89) is the membrane-bound serine endopeptidase that catalyzes the cleavage of the amino-terminal signal (or leader) peptide from secretory proteins and some membrane proteins (for recent reviews, see Refs. 1-3). Evolutionarily, SPase belongs to the protease clan SF and the protease family S26 (4). The Escherichia coli SPase has served as the model Gram-negative SPase and is the most thoroughly characterized SPase to date. It has been cloned (5), sequenced (6), overexpressed (7), purified (6,8,9), and kinetically (10), and structurally (11, 12) characterized. E. coli SPase (323 amino acids, 35,988 Da, pI 6.9) contains two amino-terminal transmembrane segments (residues 4 -28 and 58 -76), a small cytoplasmic region (residues 29 -58), and a carboxyl-terminal periplasmic catalytic region (residues 77-323). A catalytically active fragment of SPase (SPase ⌬2-75) corresponding to the periplasmic region (lacking the two transmembrane segments and the cytoplasmic domain) has been cloned, purified, characterized (13,14), and crystallized (15). Interestingly, the ⌬2-75 construct required detergent or lipid for optimal activity (14) and crystallization (15).The crystal structure of ⌬2-75 has been solved in complex with a ␤-lactam-type inhibitor as well in the apo-form (11, 12). The structures of E. coli SPase ⌬2-75 revealed that the periplasmic region of bacterial signal peptidase has a unique, mostly ␤-structure protein fold made of several coiled ␤-sheets and contains an Src homology 3-like barrel. The periplasmic region of SPase is made up of two domains. Domain I contains the catalytic residues and all of the conserved regions of sequence. It also contains an unusually large exposed hydrophobic surface that is consistent with a membrane association surface and possibly the detergent/lipid requirement of the ⌬2-75 deletion construct. The ...