The obligate intracellular parasitic bacteria rickettsiae are more closely related to mitochondria than any other microbes investigated to date. A rickettsial putative peptidase (RPP) was found to resemble the alpha and beta subunits of mitochondrial processing peptidase (MPP), which cleaves the transport signal sequences of mitochondrial preproteins. RPP showed completely conserved zinc-binding and catalytic residues compared with beta-MPP but barely contained any of the glycine-rich loop region characteristic of alpha-MPP. When the biochemical activity of RPP purified from a recombinant source was analyzed, RPP specifically hydrolyzed basic peptides and presequence peptides with frequent cleavage at their MPP-processing sites. Moreover, RPP appeared to activate yeast beta-MPP so that it processed preproteins with shorter presequences. Thus, RPP behaves as a bifunctional protein that could act as a basic peptide peptidase and a somewhat regulatory protein for other protein activities in rickettsiae. These are the first biological and enzymological studies to report that a protein from a parasitic microorganism can cleave the signal sequences of proteins targeted to mitochondria.