The Escherichia coli DNA polymerase III holoenzyme 71.1 kDa tau subunit is a 643 amino acid protein encoded by the dnaX gene. This gene also encodes the holoenzyme 56.5 kDa gamma subunit. The tau factor (as a tau'-LacZ' fusion protein) has been isolated and shown to be cleaved in vitro to form gamma and a 135 kda C-terminal cleavage product. The tau'-LacZ' fusion protein, gamma, and the C-terminal cleavage product have been isolated. N-terminal sequencing has demonstrated that tau and gamma share the same N-terminal sequences and that tau is proteolytically cleaved in vitro between residues 498 and 499 to form gamma. In addition, residues 420-440 were shown to be present in both tau and gamma by use of antibody specific for a synthetic peptide corresponding to that sequence. Some mechanism functions in vivo to ensure that tau and gamma are synthesized in a ratio of about one-to-one, as shown by radioimmune precipitation of tau and gamma from cellular extracts.