The bacterial HslVU ATP-dependent protease is a homolog of the eukaryotic 26 S proteasome. HslU ATPase forms a hexameric ring, and HslV peptidase is a dodecamer consisting of two stacked hexameric rings. In HslVU complex, the HslU and HslV central pores are aligned, and the proteolytic active sites are sequestered in an internal chamber of HslV, with access to this chamber restricted to small axial pores. Here we show that the C-terminal tails of HslU play a critical role in the interaction with and activation of HslV peptidase. A synthetic tail peptide of 10 amino acids could replace HslU in supporting the HslV-mediated hydrolysis of unfolded polypeptide substrates such as ␣-casein, as well as of small peptides, suggesting that the HslU C terminus is involved in the opening of the HslV pore for substrate entry. Moreover, deletion of 7 amino acids from the C terminus prevented the ability of HslU to form an HslVU complex with HslV. In addition, deletion of the C-terminal 10 residues prevented the formation of an HslU hexamer, indicating that the C terminus is required for HslU oligomerization. These results suggest that the HslU C-terminal tails act as a molecular switch for the assembly of HslVU complex and the activation of HslV peptidase.