Trypsin cleaves Clostridium perfringens theta-toxin (perfringolysin O or PFO) at a single site between residues 303 and 304 (Ohno-Iwashita, Y., Iwamoto, M., Mitsui, K., Kawasaki, H., and Ando, S. (1986) Biochemistry 25, 6048-6053; Tweten, R. K. (1988b) Infect. Immun. 56, 3228-3234) and yields an amino-terminal fragment of 30,208 Da (T1) and a carboxyl-terminal fragment of 22,268 Da (T2). Both peptides were purified by reverse phase chromatography of trypsin-nicked PFO. Neither peptide retained hemolytic activity. Peptide T1 had no apparent effect on the hemolytic activity of PFO, whereas T2 was found to inhibit the hemolytic activity of PFO and was analyzed further. The order of binding of T2 and PFO to membranes did not alter the inhibitory effect of T2 on PFO-induced hemolysis, indicating that competitive binding by T2 for PFO membrane binding sites was not the basis for the observed inhibition. Further analysis showed that T2 could inhibit membrane-dependent fluorescence energy transfer (FET) between PFO molecules labeled with fluorescein (fluorescent donor) or tetramethylrhodamine (fluorescent acceptor). This provided evidence that T2 could complex with PFO. T2 was also found to be incapable of self-aggregation (as opposed to PFO), since preincubation of T2 with either erythrocytes or erythrocyte ghost membranes did not affect the T2-dependent inhibition of hemolysis or FET. These data indicate that T2 inhibits PFO-dependent hemolysis by forming a complex with PFO, which inhibits aggregation and that the membrane binding site and a single aggregation site remain intact on T2.