A bacterial expression system for the beta-subunit of hCG (hCG beta) has been developed to produce suitable amounts of this protein for structural and biological studies. To produce hCG beta in Escherichia coli, the nucleotide sequence that encodes the amino acid leader sequence was removed from the hCG beta complementary DNA, and the gene was cloned into a pET expression vector. After induction of protein synthesis in host bacteria, recombinant hCG beta (rhCG beta) accumulated in inclusion bodies in an unfolded state. The inclusion bodies were purified from induced cultures of E. coli, solubilized in urea, and fractionated by reverse phase HPLC. In this way, 6-7 mg unfolded hCG beta were recovered from 1 liter culture, rhCG beta was folded in the presence of 6.4 mM cysteamine and 3.6 mM cystamine at pH 8.7 at a final concentration of 0.02 mg/ml protein. The folded protein assembled with urinary hCG alpha and the purified rhCG beta/urinary alpha dimer bound to and activated the human LH/CG receptor permanently expressed in a cell line, indicating that it was a functional hormone. The rhCG beta/urinary alpha dimer also stimulated in vivo ovulation in rats, thus confirming the biological activity of bacterially expressed hCG beta. Because E. coli lacks the ability to glycosylate proteins, these activity results indicate that the N-linked and O-linked oligosaccharides of hCG beta are not required for protein folding, subunit assembly, or full biological activity. The success of producing hCG beta in bacteria and of folding it in vitro implies that the beta-subunits of the other members of the glycoprotein hormone family, LH, FSH, and TSH, can also be produced in this manner. This may facilitate structural studies of these hormones as well as lead to the production of recombinant hormones for biological studies and clinical use.