Peptide deformylase (EC 22.214.171.124) catalyzes the removal of a formyl group from the N-termini of nascent ribosome-synthesized polypeptides, an obligatory step during protein maturation in eubacteria. Since its discovery in crude Escherichia coli extracts 3 decades ago, the deformylase has resisted all attempts of purification or characterization due to its extraordinary lability. By placing the coding sequence (def gene) of Escherichia coli deformylase behind a bacteriophage T7 promoter, we have, however, been able to overexpress this deformylase in Escherichia coli. Overproduction has allowed the purification of > 50 mg of deformylase enzyme from each liter of cell culture. Purified deformylase is highly active toward N-formylated peptide substrates. A new, sensitive assay for the deformylase has been developed by measuring the amount of released formate using a formate dehydrogenase. This has allowed for the assessment of the catalytic properties of peptide deformylase using a series of synthetic N-formylated peptides as substrates. The deformylase exhibits strong preference for an L-methionine or the isosteric norleucine at the N-terminus of a substrate and has broad specificity for the rest of the residues. Small divalent metal chelators strongly inhibit the E. coli deformylase. In particular, certain 1,2- and 1,3-dithiol compounds act as potent, time-dependent inhibitors of the peptide deformylase.