We have purified proteasomes to apparent homogeneity from the archaebacterium Thermoplasma acidophilum. This proteinase has a molecular mass of about 650 kDa and an isoelectric point of 5.6. The proteasome hydrolyses peptide substrates containing an aromatic residue adjacent to the reporter group, as well as [14C]methylated casein optimally at pH 8.5 and 90 degrees C. The enzyme activity is enhanced severalfold by Mg2+ and Ca2+ at 25-500 mM. This increase in activity results primarily from a change in Km. The serine-proteinase inhibitors diisopropylfluorophosphate and 3,4-dichloroisocoumarin irreversibly inhibit the enzyme, obviously by modification of both the alpha and beta subunits in the proteasome. The inhibition of proteasomal activity by the peptidylchloromethanes, Cbz-Leu-Leu-CH2Cl and Cbz-Ala-Ala-Phe-CH2Cl (Cbz, benzyloxycarbonyl), is reversible and predominantly of a competitive type. The enzyme is not activated by any of the compounds that typically stimulate the activities of the eukaryotic proteasome.