The effect of phospholipids on the trypsin-like, chymotrypsin-like and peptidylglutamyl-peptide-hydrolysing activities of the so-called latent form of the rat liver multicatalytic proteinase was studied, assaying them with the following substrates: N-Cbz-ARR-4MNA (N-Cbz, N-benzyloxycarbonyl; 4MNA, 4-methoxy-beta-naphthylamide), N-Suc-LLVY-MCA (N-Suc, N-succinyl; MCA, methylcoumarin) and N-Cbz-LLE-beta-NA (beta-NA, beta-naphthylamide) respectively (amino acids are shown as their one-letter symbol). For the most part neither lysophospholipids nor phospholipids at 20 micrograms/ml have any effect on the activity of the enzyme (assayed at 50 microM peptide), except for phosphatidylserine, which activates 2-fold the hydrolysis of N-Suc-LLVY-MCA, and phosphatidylinositol, which inhibits by 20% the hydrolysis of N-Cbz-LLE-beta-NA. By contrast, cardiolipin (diphosphatidylglycerol) is a strong activator of the hydrolysis of N-Suc-LLVY-MCA (60-fold) and N-Cbz-LLE-beta-NA (30-fold), with half-maximal activation at concentrations of 0.15 micrograms/ml and 1.5 micrograms/ml respectively. The activation of N-Suc-LLVY-MCA hydrolysis is due to an increase of the affinity of the enzyme for the peptide and to an increase in the Vmax. (30-fold). The activation of N-Cbz-LLE-beta-NA hydrolysis is explained by suppressing the co-operativity for this substrate, producing hyperbolic kinetics with a Km of 60 microM and a 15-fold increase in the Vmax. of the enzyme. This activation by cardiolipin was completely suppressed by micromolar concentrations of fluophenazine, a drug known to inhibit other phospholipid-regulated process. Cardiolipin activation and the known activation by SDS are additive, either at suboptimal or optimal concentrations of both activators. Cardiolipin also activates the in vitro degradation of some proteins from metabolically labelled total cellular extracts by the latent multicatalytic proteinase. These results clearly show that cardiolipin is a natural positive modulator of the peptidase and proteolytic activities of the multicatalytic proteinase, probably acting through a binding site different from that of SDS.