A proteolytic activity hydrolyzing denatured proteins of Bacillus megaterium labelled with 35S or 14C amino acids was detected in cells of the asporogenic strain of Bacillus megaterium. The substrate is hydrolyzed by the enzyme or enzymes at optimum pH around 7, their activity being almost completely inhibited by EDTA and o-phenanthroline. PMSF, the inhibitor of serine proteases, is slightly inhibitory. Gel filtration on a Sephadex column separated the protease activity to two or three fractions. The protease activity in cells with the repressed synthesis of protease corresponds to 5-20 mug of substrate degraded per hour by 1 mg of protein at 37 degrees C. It increases five to ten-fold during the derepression. When the intracellular protease activity increases the extracellular enzyme begins to be excreted into the medium. The intracellular protease activity rapidly decreases after the addition of chloramphenicol or of a mixture of amino acids to the derepressed culture. Half or even more of the protease activity is released from the cells during their conversion to protoplasts by means of lysozyme. This "periplasmic" activity remains mostly in the supernatant also after mesosomes have been centrifuged down from the periplasm. A portion of the activity bound in protoplasts sediments together with membrane fraction after their lysis.

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