Pro-aminopeptidase processing protease (PA protease) is an extracellular zinc metalloprotease produced by Aeromonas caviae T-64 and it is classified as M04.016 according to the MEROPS database. The precursor of PA protease consists of four regions; a signal peptide, an N-terminal propeptide, a C-terminal propeptide, and the mature PA protease. The in vitro refolding of the intermediate pro-PA protease containing the C-terminal propeptide (MC) was investigated in the presence and absence of the N-terminal propeptide. The results indicate that the noncovalently linked N-terminal propeptide is able to assist in the refolding of MC. In the absence of the N-terminal propeptide, MC is trapped into a folding competent state that is converted into the active form by the addition of the N-terminal propeptide. Moreover, the N-terminal propeptide was found to form a complex with the folded MC and inhibit further processing of MC into the mature PA protease. Inhibitory activity of the purified N-terminal propeptide toward mature PA protease was also observed, and the mode of this inhibition was determined to be a mixed, noncompetitive inhibition with an associated allosteric effect.