beta-Ketoacyl-acyl carrier protein (ACP) synthase III (the fabH gene product) condenses acetyl-CoA with malonyl-ACP to initiate fatty acid biosynthesis in the dissociated, type II fatty acid synthase systems typified by Escherichia coli. The accumulation of malonyl-acyl carrier protein (ACP) following the inhibition of a reconstituted fatty acid synthase system by acyl-ACP implicated synthase III (FabH) as a target for acyl-ACP regulation (Heath, R. J., and Rock, C. O. (1996) J. Biol. Chem. 271, 1833-1836); therefore, the FabH protein was purified and its biochemical and regulatory properties examined. FabH exhibited a Km of 40 microM for acetyl-CoA and 5 microM for malonyl-ACP. FabH also accepted other acyl-CoAs as primers with the rank order of activity being acetyl-CoA approximately propionyl-CoA >> butyryl-CoA. FabH utilized neither hexanoyl-CoA nor octanoyl-CoA. Acyl-ACPs suppressed Fabh activity, and their potency increased with increasing acyl chain length between 12 and 20 carbon atoms. Nonesterified ACP was not an inhibitor. Acyl-ACP inhibition kinetics were mixed with respect to acetyl-CoA, but were competitive with malonyl-ACP, indicating that acyl-ACPs decrease FabH activity by binding to either the free enzyme or the acyl-enzyme intermediate. These data support the concept that the inhibition of chain initiation at the beta-ketoacyl-ACP synthase III step contributes to the attenuation of fatty acid biosynthesis by acyl-ACP.