TolAI-II-beta -lactamase, a fusion protein consisting of the inner membrane and transperiplasmic domains of TolA followed by TEM-beta -lactamase associated with the inner membrane but remained confined to the cytoplasm when expressed at high level in Escherichia coil. Although the fusion protein was resistant to proteoly- sis in vivo, it was hydrolyzed during preparative SDS-polyacrylamide electrophoresis and when insoluble cellular fractions unfolded with 5 M urea were subjected to microdialysis, Inhibitor profiling studies revealed that both a metallo- and serine protease were involved in TolAI-II-beta -lactamase degradation under denaturing conditions. The in vitro degradation rates of the fusion protein were not affected when insoluble fractions were harvested from a strain lacking protease TV, but were significantly reduced when microdialysis experiments were conducted with material isolated from an isogenic ftsH1 mutant. Adenine nucleotides were not required for degradation, and ATP supplementation did not accelerate the apparent rate of TolAI-II-beta -lactamase hydrolysis under denaturing conditions. Our results indicate that the metalloprotease active site of FtsH remains functional in the presence of 3-5 M urea and suggest that the ATPase and proteolytic activities of FtsH can be uncoupled if the substrate is sufficiently unstructured. Thus, a key role of the FtsH AAA module appears to be the net unfolding of bound substrates so that they can be efficiently engaged by the protease active site.