The matrix processing peptidase from yeast (Saccharomyces cerevisiae) mitochondria was expressed in Escherichia coli via a plasmid-borne operon encoding the mature forms of the alpha and beta subunits of the enzyme. The subunits assembled into a fully active, soluble enzyme. The mature subunits were also expressed individually. The alpha subunit accumulated in large amounts and was obtained at a purity of 80% after a single chromatographic step. The beta-subunit-producing strain expressed an intact and a degraded form of the beta subunit, both of them soluble in the cytoplasm. Extract from either the alpha- or the beta-subunit-producing strain (S-alpha or S-beta extract, respectively), as well as the purified alpha subunit, was enzymatically inactive. However, precursor cleavage activity was restored by mixing either the S-alpha extract or the purified alpha subunit with the S-beta extract. The reconstituted processing activity was indistinguishable from the authentic holopeptidase.