Ty1 is one of the many transposons in the budding yeast Saccharomyces cerevisiae. The life-cycle of Ty1 shows numerous similarities with that of retroviruses, e.g. the initially synthesized polyprotein precursor undergoes proteolytic processing by the protease. The retroviral proteases have become important targets of current antiretroviral therapies due to the critical role of the limited proteolysis of Gag-Pol polyprotein in the replication cycle and they therefore belong to the most well-studied enzymes. Comparative analyses of retroviral and retroviral-like proteases can help to explore the key similarities and differences which may help understanding how resistance is developed against protease inhibitors, but the available information about the structural and biochemical characteristics of retroviral-like, and especially retrotransposon, proteases is limited. To investigate the main characteristics of Ty1 retrotransposon protease of Saccharomyces cerevisiae, untagged and His6-tagged forms of Ty1 protease were expressed in E. coli. After purification of the recombinant proteins, activity measurements were performed using synthetic oligopeptide and fluorescent recombinant protein substrates, which represented the wild-type and the modified forms of naturally occurring cleavage sites of the protease. We investigated the dependence of enzyme activity on different reaction conditions (pH, temperature, ionic strength, and urea concentration), and determined enzyme kinetic parameters for the studied substrates. Inhibitory potentials of 10 different protease inhibitors were also tested. Ty1 protease was not inhibited by the inhibitors which have been designed against human immunodeficiency virus type 1 protease and are approved as antiretroviral therapeutics. A quaternary structure of homodimeric Ty1 protease was proposed based on homology modeling, and this structure was used to support interpretation of experimental results and to correlate some structural and biochemical characteristics with that of other retroviral proteases.