The report by Zimmermann et al. (J. Biol. Chem. 257, 1982, 6529-6536) that the active site of Escherichia coli leader peptidase (LPase) is located in the periplasm led us to explore the possibility that soluble, active short forms of LPase could be produced. Detergent-free delta 2-75 mutant protein (LPase-sf) lacking the two N-terminal transmembrane spanning and the cytoplasmic domains was produced in high yield. The mass of the protein determined by electrospray ionization mass spectrometry was 27,952 amu. The increase of 42 amu over that predicted by the expected amino acid sequence indicates that the N-terminus of LPase-sf is acetylated. This is consistent with the inability to obtain an N-terminal sequence. LPase-sf lacks the site of autolysis present in LPase, thus circumventing problems associated with enzyme autocatalytic instability. LPase-sf and wild type LPase displayed comparable activity versus two peptide substrates. The peptides, based upon the cleavage sites of procoat and the precursor of maltose binding protein, were processed at the expected sites. In addition, the activity of both LPase's was not inhibited by classical inhibitors of the four classes of proteases. LPase-sf displayed similar activity in the presence and absence of detergent. Wild type LPase displayed specificity for alanine in the P1 subsite of the peptide WSASALX*KI and did not hydrolyze peptides with glycine, valine, or serine in that position. The availability of a detergent-free active form of LPase should facilitate mechanistic and structural studies.