FtsH (HflB) is a conserved, highly specific, ATP-dependent protease for which a number of substrates are known. The enzyme participates in the phage lambda lysis-lysogeny decision by degrading the lambda CII transcriptional activator and by its response to inhibition by the lambda CIII gene product. In order to gain further insight into the mechanism of the enzymatic activity of FtsH (HflB), we identified the peptides generated following proteolysis of the phage lambda CII protein. It was found that FtsH (HflB) acts as an endopeptidase degrading CII into small peptides with limited amino acid specificity at the cleavage site. beta-Casein, an unstructured substrate, is also degraded by FtsH (HflB), suggesting that protein structure may play a minor role in determining the products of proteolysis. The majority of the peptides produced were 13 to 20 residues long.