Prolyl 4-hydroxylase (P4-H) consists of two distinct polypeptides; the catalytically more important alpha-subunit and the beta-subunit, which is identical to the multifunctional enzyme protein disulphide isomerase. The enzyme appears to be assembled in vivo into an alpha 2 beta 2 tetramer from newly synthesized alpha-subunits associating with an endogenous pool of beta-subunits. Using a cell-free system, we have shown previously that enzyme assembly is redox-dependent and that assembled alpha-subunits are intramolecularly disulphide-bonded [John and Bulleid (1994) Biochemistry 33, 14018-14025]. Here we have studied this assembly process within intact cells by expressing both subunits in COS-1 cells. Newly synthesized alpha-subunits were shown to assemble with the beta-subunit, to form insoluble aggregates, or to remain soluble but not associate with the beta-subunit. Treatment of cells with dithiothreitol (DTT) led to dissociation of P4-H into subunits and on removal of DTT the enzyme reassembled. This reassembly was ATP-dependent, suggesting an interaction with an ATP-dependent chaperone. This was confirmed when immunoglobulin-heavy-chain binding protein (BiP) and alpha-subunits were co-immunoprecipitated with antibodies against the alpha-subunit and BiP, respectively. These results indicate that unassembled alpha-subunits are maintained in an assembly-competent form by interacting with the molecular chaperone BiP.