Despite knowledge of the physiological significance and regulation of protein degradation in bacteria, the pathway of proteolysis and the responsible enzymes are still not known. Degradation of cell proteins in bacterial and animal cells requires continuous ATP production, inhibition of which in Escherichia coli prevents the degradation of normal proteins in growing cells, accelerated breakdown of such proteins in starving cultures and the very rapid breakdown of abnormal proteins. Intracellular proteolysis proceeds by repeated endoproteolytic steps and ATP is required for the initial cleavages of the substrate. We have recently demonstrated ATP stimulation of proteolysis in extracts of bacterial and animal cells. These ATP-stimulated systems seem to be responsible for the rapid degradation of abnormal proteins in vivo, but they may also be involved in the catabolism of normal cell proteins, limited proteolysis, such as the processing of precursors for secreted or membrane proteins, and the selective inactivation of specific proteins, as occurs in the ATP-dependent cleavage of the lambda repressor by the recA protein. We report here that membrane fragments contain an ATP-stimulated protease that degrades cell proteins to large peptides (of molecular weight (MW) 71,500) which are then rapidly hydrolysed to amino acids by soluble ATP-independent enzymes.