The processing of propeptides and the maturation of 20S proteasomes require the association of beta rings from two half proteasomes. We propose an assembly-dependent activation model in which interactions between helix (H3 and H4) residues of the opposing half proteasomes are prerequisite for appropriate positioning of the S2-S3 loop; such positioning enables correct coordination of the active-site residue needed for propeptide cleavage. Mutations of H3 or H4 residues that participate in the association of two half proteasomes inhibit activation and prevent, in nearly all cases, the formation of full proteasomes. In contrast, mutations affecting interactions with residues of the S2-S3 loop allow the assembly of full, but activity impacted, proteasomes. The crystal structure of the inactive H3 mutant, Phe145Ala, shows that the S2-S3 loop is displaced from the position observed in wild-type proteasomes. These data support the proposed assembly-dependent activation model in which the S2-S3 loop acts as an activation switch.