The F(1)F(o)-ATP synthases of alkaliphilic bacteria exhibit latent ATPase activity, and for the thermoalkaliphile Bacillus sp. strain TA2.A1, this activity is intrinsic to the F(1) moiety. To study the mechanism of ATPase inhibition, we developed a heterologous expression system in Escherichia coli to produce TA2F(1) complexes from this thermoalkaliphile. Like the native F(1)F(o)-ATP synthase, the recombinant TA2F(1) was blocked in ATP hydrolysis activity, and this activity was stimulated by the detergent lauryldimethylamine oxide. To determine if the C-terminal domain of the epsilon subunit acts as an inhibitor of ATPase activity and if an electrostatic interaction plays a role, a TA2F(1) mutant with either a truncated epsilon subunit [i.e., TA2F(1)(epsilon(DeltaC))] or substitution of basic residues in the second alpha-helix of epsilon with nonpolar alanines [i.e., TA2F(1)(epsilon(6A))] was constructed. Both mutants showed ATP hydrolysis activity at low and high concentrations of ATP. Treatment of the purified F(1)F(o)-ATP synthase and TA2F(1)(epsilon(WT)) complex with proteases revealed that the epsilon subunit was resistant to proteolytic digestion. In contrast, the epsilon subunit of TA2F(1)(epsilon(6A)) was completely degraded by trypsin, indicating that the C-terminal arm was in a conformation where it was no longer protected from proteolytic digestion. In addition, ATPase activity was not further activated by protease treatment when compared to the untreated control, supporting the observation that epsilon was responsible for inhibition of ATPase activity. To study the effect of the alanine substitutions in the epsilon subunit in the entire holoenzyme, we reconstituted recombinant TA2F(1) complexes with F(1)-stripped native membranes of strain TA2.A1. The reconstituted TA2F(o)F(1)(epsilon(WT)) was blocked in ATP hydrolysis and exhibited low levels of ATP-driven proton pumping consistent with the F(1)F(o)-ATP synthase in native membranes. Reconstituted TA2F(o)F(1)(epsilon(6A)) exhibited ATPase activity that correlated with increased ATP-driven proton pumping, confirming that the epsilon subunit also inhibits ATPase activity of TA2F(o)F(1).