Streptococcal protein G is an IgG-binding receptor with a molecular weight of 63 kDa as predicted from the sequence of the corresponding gene. Here we show that a truncated recombinant protein of 23 kDa still has IgG-binding capacity and also interacts specifically with human serum albumin (HSA). This demonstrates that protein G is a bifunctional receptor. To investigate the structures needed for IgG- and albumin-binding, different parts of the receptor molecule were produced in E. coli using a coupled expression/secretion system. Affinity chromatography, using IgG or HSA immobilized on Sepharose, showed that the two binding activities are structurally separated. From these experiments, it was concluded that a region of 64 amino acid residues is sufficient for albumin-binding. The structure of this part of the protein suggests either a divalent or a trivalent binding capacity. The specific interaction to albumin was used to purify a heterologous protein by affinity chromatography to yield a pure fusion protein in a one-step procedure. The implication of this novel affinity system as a tool to facilitate protein immobilization and purification is discussed.