A distinct class of the biologically important subtilisin family of serine proteases functions exclusively within the cell and forms a major component of the bacilli degradome. However, the mode and mechanism of posttranslational regulation of intracellular protease activity are unknown. Here we describe the role played by a short N-terminal extension prosequence novel amongst the subtilisins that regulates intracellular subtilisin protease (ISP) activity through two distinct modes: active site blocking and catalytic triad rearrangement. The full-length proenzyme (proISP) is inactive until specific proteolytic processing removes the first 18 amino acids that comprise the N-terminal extension, with processing appearing to be performed by ISP itself. A synthetic peptide corresponding to the N-terminal extension behaves as a mixed noncompetitive inhibitor of active ISP with a K i of 1 μM. The structure of the processed form has been determined at 2.6 Å resolution and compared with that of the full-length protein, in which the N-terminal extension binds back over the active site. Unique to ISP, a conserved proline introduces a backbone kink that shifts the scissile bond beyond reach of the catalytic serine and in addition the catalytic triad is disrupted. In the processed form, access to the active site is unblocked by removal of the N-terminal extension and the catalytic triad rearranges to a functional conformation. These studies provide a new molecular insight concerning the mechanisms by which subtilisins and protease activity as a whole, especially within the confines of a cell, can be regulated.posttranslational modification | protease regulation | proprotein activation | protease structure S ubtilisins are serine endopeptidases ubiquitous in nature, spread across the eubacteria, archaebacteria, eukaryotes, and viruses (1). They play a variety of important biological roles that include specific posttranslational processing of hormones (2, 3), virulence and infection factors in various pathogens (4, 5), and as nonspecific digestive proteases (1). The distinctive primary structure features common to the majority of subtilisins, and typified by the bacilli extracellular subtilisins (ESP), comprise a N-terminal signal sequence with an adjacent prodomain required for correct folding of the mature, catalytic domain (6-8) (Fig. 1A). Both the signal sequence and the prodomain are posttranslationally removed, the latter autocatalytically. The bacilli ESPs have a broad substrate specificity that suites their role as scavenging proteases, and their robustness to harsh environments coupled with extensive protein engineering has resulted in their exploitation by industry for a variety of applications, in particular as an active ingredient in laundry detergents (6, 7, 9, 10). The ESPs have proved excellent paradigms for understanding key molecular features of proteins, including enzyme catalysis (11) and protein folding (6-8).The intracellular subtilisins (ISPs) are a distinctive class found in many different bacilli and re...