During aerobic growth of Klebsiella pneumoniae on malonate, a soluble malonate decarboxylase is induced. Malonate decarboxylation consumes a proton (not H2O) and forms acetate and CO2 (not HCO3-) as products. The enzyme was purified 56-fold to apparent homogeneity. It has a native molecular mass of 142 kDa and consists of four subunits alpha, beta, gamma and delta with molecular masses of 65, 34, 30, and 12 kDa, respectively. Two different forms of the enzyme were recognised: a catalytically inactive SH-enzyme and the catalytically active acetyl-S-enzyme which is formed by post-translational acetylation of the SH-enzyme with ATP, acetate and a specific ligase. The acetyl-S-enzyme was converted into the SH-enzyme by incubation with hydroxylamine or dithioerythritol. Chemical reacylation of the SH-enzyme, which restores catalytic activity, was achieved with acetic anhydride or more efficiently with malonyl-CoA. This acylation of the SH group was prevented after incubation with various thiol-specific reagents. After incubation of the SH-enzyme with iodo[1-14C]acetate, the delta subunit became specifically labelled. This subunit was also labelled after incubation of the acetyl-S-enzyme with [2-14C]malonate. The radioactivity was completely liberated from the protein upon malonate addition. These results indicate that the delta subunit is the acyl-carrier protein of the complex and that malonate decarboxylation proceeds in two steps: the acetyl residue on the ACP is first replaced by a malonyl residue which subsequently undergoes decarboxylation thereby regenerating the acetyl-S-ACP. The binding site for the acyl residues on the acyl-carrier protein was shown to be 2'-(5"-phosphoribosyl)-3'-dephospho-CoA after alkaline cleavage of this prosthetic group from the enzyme and chromatographic as well as mass spectroscopic analyses.