Most nuclearly encoded mitochondrial proteins are synthesized with an amino-terminal leader peptide that is cleaved by the mitochondrial processing peptidase (MPP). Purified rat liver MPP, like the Neurospora and yeast enzymes, consists of two nonidentical subunits, alpha (55 kDa) and beta (50 kDa). To confirm the functional authenticity of the recently cloned and sequenced cDNAs for the alpha- and beta-MPP subunits from rat liver and to study each subunit's participation in MPP activity, we have subcloned and expressed separately in Escherichia coli the mature sequence of each subunit as a fusion protein with the maltose-binding protein. After induction, about 80% of each expressed fusion protein was insoluble in aggregates or inclusion bodies, and 20% remained soluble in the supernatant. The fusion proteins in the soluble fraction were purified by affinity chromatography and treated with factor Xa, and the MPP subunits were purified to homogeneity. When mixed together, these subunits showed no activity, suggesting that they might be misfolded. Therefore, a reconstitution protocol was developed which consisted of denaturation in urea, dithiothreitol, and 2-mercaptoethanol, followed by renaturation by dilution and dialysis under reducing conditions. With this procedure, active MPP was recovered from the mixed subunits, and it could be demonstrated that both alpha- and beta-MPP subunits were necessary for activity. Reconstituted recombinant MPP resembled the native rat liver enzyme as judged by its molecular weight, its inhibition by EDTA, and its ability to process a variety of mitochondrial precursor proteins appropriately to either an intermediate or a mature form.