In earlier studies of the membrane-bound penicillinase of Bacillus licheniformis 749/C, the enzyme present in the vesicles that were released during protoplast formation and the enzyme retained in the plasma membrane of protoplasts appeared to differ (i) in their behavior on gel permeation chromatography in the presence or absence of deoxycholate and (ii) in their tendency to convert to the hydrophilic exoenzyme (Sargent and Lampen, 1970). We have now shown that these vesicle preparations contain a soluble, heat-sensitive enzyme(s) that is released along with the vesicles during protoplast formation. The enzyme will convert the vesicle penicillinase to a form that resembles exopenicillinase, and this conversion can be inhibited by deoxycholate under certain circumstances. Sedimentation of such vesicle preparations at 100,000 X g produces vesicles which contain penicillinase that behaves as the plasma membrane enzyme obtained from protoplasts. Exopenicillinases released by growing cells at pH 6.5 and by washed cells or protoplasts at pH 9.0 have the same NH2-terminal residues (lysine and some glutamic acid); in addition, the various release systems show a parallel sensitivity to inhibition by deoxycholate, quinacrine, chloroquine, and o-phenanthroline. The formation of exopenicillinase (by cleavage of the membrane-bound enzyme) may well be dependent on the action of the releasing enzyme.