A high level E. coli expression system has been constructed for the Penicillium chrysogenum penDE gene, which encodes the acyl-coenzyme A: isopenicillin N-acyltransferase (AT) enzyme. Induction of overexpression of recombinant AT (recAT) by increasing the growth temperature of the host adversely affected solubility and activity of the AT enzyme. Addition of isopropylthio-beta-D-galactopyranoside (IPTG) at decreased growth temperatures (less than 32 degrees C) resulted in the overproduction of soluble, active recAT. When purified to homogeneity, recAT was an alpha, beta-heterodimer, comprised of 11 kDa (alpha) and 29 kDa (beta) subunits, derived from a 40 kDa precursor polypeptide by a posttranslational cleavage. The recAT enzyme contained both the acyl-coenzyme A: isopenicillin N-acyltransferase and the acyl-coenzyme A: 6-aminopenicillanic acid acyltransferase activities. The processing event that generated the two subunits of recAT from the 40 kDa precursor polypeptide occurred between Gly102/Cys103. This expression system produced a large amount of soluble, active recAT that is identical to native AT, making it a suitable source of AT enzyme for further characterization.