Inclusion bodies produced in Escherichia coli are composed of densely packed denatured protein molecules in the form of particles. Refolding of inclusion body proteins into bioactive forms is cumbersome, results in poor recovery and accounts for the major cost in production of recombinant proteins from E. coli. With new information available on the structure and function of protein aggregates in bacterial inclusion bodies, it has been possible to develop improved solubilization and refolding procedures for higher recovery of bioactive protein. Inclusion bodies are formed from partially folded protein intermediates and are composed of aggregates of mostly single types of polypeptide. This helps to isolate and purify the protein aggregates to homogeneity before solubilization and refolding. Proteins inside inclusion body aggregates have native-like secondary structures. It is assumed that restoration of this native-like secondary structure using mild solubilization conditions will help in improved recovery of bioactive protein in comparison to solubilization using a high concentration of chaotropic agent. Analysis of the dominant forces causing aggregation during inclusion body formation provides information to develop suitable mild solubilization procedures for inclusion body proteins. Refolding from such solubilized protein will be very high due to restoration of native-like secondary structure. Human growth hormone inclusion bodies were purified to homogeneity from E. coli cells before solubilization and refolding. Pure inclusion bodies were solubilized at alkaline pH in the presence of 2 M urea solution. The solubilized proteins were refolded using a pulsatile renaturation process and subsequently purified using chromatographic procedures. More than 40% of the inclusion body proteins could be refolded back to the bioactive native conformation. Mild solubilization is thus the key for high recovery of bioactive protein from inclusion bodies.