Escherichia coli ClpAP protease is an ATP-dependent protease composed of the proteolytic component ClpP and a regulatory ATPase, ClpA. ClpAP protease degraded a variety of peptide bonds in protein and peptide substrates at a slow rate (kcat < or = 30 min-1/subunit of ClpP), but showed very high activity (kcat > or = 800 min-1) for a synthetic peptide composed of the first 19 amino acids of ClpP, MSYSGERDNFAPHMALVPV, referred to as the propeptide. The propeptide was not degraded by ClpP alone, but was degraded in the presence of ClpA and ClpP. Degradation was activated by nonhydrolyzable analogs of ATP, indicating that nucleotide-promoted interaction between ClpA and ClpP is sufficient to activate ClpP for propeptide cleavage. The propeptide, as well as truncated forms lacking either the first 9 or the last 3 amino acids, was cleaved at the same Met-Ala bond at which autoprocessing occurs in vivo. No hydrolysis of FAPHMALVPV derivatives was observed when Met was replaced by Glu, Lys, Ser, Tyr, Ile, and D-Met, but cleavage at the same position did occur with Leu or Trp substitutions. A peptide composed of a tandem repeat of FAPHMALVPV was cleaved between both Met-Ala bonds (Kcat values > or = 39 min-1). Propeptides inhibited degradation of alpha-casein by competition for a binding site on ClpA, and they stimulated the basal ATPase activity of ClpA in the absence of ClpP. Peptides and protein substrates interact at an allosteric site on ClpA, which appears to be the site at which specific substrates are recognized by the Clp protease.