The protease of the human immunodeficiency virus type I (HIV1) was expressed both intracellularly and extracellularly in Saccharomyces cerevisiae. Intracellular expression of the protease was achieved by fusing a 179 amino acid precursor form of the protease to human superoxide dismutase (hSOD). Self-processing of the viral enzyme from the hybrid precursor was demonstrated to occur within the yeast host. Secretion of the protease was achieved by fusing the leader sequence of yeast alpha-factor to the precursor form of the protease or to the 99 amino acid mature form of the protease. Authentic and active forms of the retroviral enzyme were detected in yeast supernatants of cells expressing the precursor or the mature form of the protease. A D25E active site variant of the retroviral enzyme exhibited diminished autocatalytic activity when expressed intracellularly or secreted from yeast. The wild-type protease was active in an in vitro assay on the natural substrate, myristylated gag precursor, Pr53gag. Correct processing of Pr53gag at the Tyr 138-Pro 139 junction was confirmed by amino terminal sequence analysis of the resulting capsid protein (CA, p24). The secreted protease was purified to homogeneity from yeast media using preparative isoelectric focusing and reverse-phase HPLC. Amino terminal sequence analysis showed a sequence beginning at amino acid 1 of the mature enzyme (Pro) and another sequence beginning at amino acid 6 (Trp). This shorter sequence may represent a natural autolytic product of the protease.