The twin-arginine translocation (Tat) system targets cofactor-containing proteins across the Escherichia coli cytoplasmic membrane via distinct signal peptides bearing a twin-arginine motif. In this study, we have analysed the mechanism and capabilities of the E. coli Tat system using green fluorescent protein (GFP) fused to the twin-arginine signal peptide of TMAO reductase (TorA). Fractionation studies and fluorescence measurements demonstrate that GFP is exported to the periplasm where it is fully active. Export is almost totally blocked in tat deletion mutants, indicating that the observed export in wild-type cells occurs predominantly, if not exclusively, by the Tat pathway. Imaging studies reveal a halo of fluorescence in wild-type cells corresponding to the exported periplasmic form; the GFP is distributed uniformly throughout the cytoplasm in a tat mutant. Because previous work has shown GFP to be incapable of folding in the periplasm, we propose that GFP is exported in a fully folded, active state. These data also show for the first time that heterologous proteins can be exported in an active form by the Tat pathway.