The effects of chain cleavage and circular permutation on the structure, stability, and activity of dihydrofolate reductase (DHFR) from Escherichia coli were investigated by various spectroscopic and biochemical methods. Cleavage of the backbone after position 86 resulted in two fragments, {1-86} and {87-159}, each of which are poorly structured and enzymatically inactive. When combined in a 1 : 1 molar ratio, however, the fragments formed a high-affinity (K a ס 2.6 × 10 7 M −1) complex that displays a weakly cooperative urea-induced unfolding transition at micromolar concentrations. The retention of about 15% of the enzymatic activity of full-length DHFR is surprising, considering that the secondary structure in the complex is substantially reduced from its wild-type counterpart. In contrast, a circularly permuted form with its N-terminus at position 86 has similar overall stability to full-length DHFR, about 50% of its activity, substantial secondary structure, altered side-chain packing in the adenosine binding domain, and unfolds via an equilibrium intermediate not observed in the wild-type protein. After addition of ligand or the tightbinding inhibitor methotrexate, both the fragment complex and the circular permutant adopt more nativelike secondary and tertiary structures. These results show that changes in the backbone connectivity can produce alternatively folded forms and highlight the importance of protein-ligand interactions in stabilizing the active site architecture of DHFR.