alpha-Lytic protease, an extracellular bacterial serine protease, is synthesized with a large pro region that is required in vivo for the proper folding of the protease domain. To allow detailed mechanistic study, we have reconstituted pro region-dependent folding in vitro. The pro region promotes folding of the protease domain in the absence of other protein factors or exogenous energy sources. Surprisingly, we find that the pro region is a high affinity inhibitor of the mature protease. The pro region also inhibits the closely related Streptomyces griseus protease B, but not the more distantly related, yet structurally similar protease, elastase. Based on these data, we suggest a mechanism in which pro region binding reduces the free energy of a late folding transition state having native-like structure.