Maturation of eukaryotic 20S proteasomes involves the processing of beta-subunits by limited proteolysis. To study the processing mechanism we analysed different point mutations of the beta-subunit LMP2 in transfected human T2 cells. Here we show that the presence of the intact Gly-1Thr1 consensus motif and Lys33 are essential for correct processing. Mutation of Thr1, the active site residue in mature subunits, or of Lys33, results in complete inhibition of processing at the consensus site. In addition, proprotein processing in vitro of wild-type LMP2, incorporated in immature 16S precursor complexes, can be blocked by a proteasome-specific inhibitor. While the processing of inhibitor-treated wild-type proprotein was completely prevented, the site-directed mutagenesis of LMP2 results in processing intermediates carrying an extension of 8-10 residues preceding Thr1, suggesting an additional cleavage event within the prosequence. Furthermore, exchange of mammalian prosequences interferes with processing efficiency and suggests subunit specificity. Based on our data we propose a model for self-activation of proteasomal beta-subunits in which residue Thr1 serves as nucleophile and Lys33 as proton donor/acceptor. We provide evidence that subunit processing of mammalian beta-subunits proceeds via a novel ordered two-step mechanism involving autocatalysis.