The pyruvate oxidase of Escherichia coli is a homo-tetrameric enzyme which can be activated greater than 500-fold (kcat/Km) by limited proteolytic digestion with alpha-chymotrypsin in the presence of pyruvate and thiamine pyrophosphate. The cleavage produces an Mr 2000 peptide (the alpha-peptide) from each subunit and mimics the physiologically important activation of the enzyme by phospholipids. Moreover, the proteolytic cleavage results in the loss of the high affinity lipid-binding site of the enzyme. We now report the isolation and characterization of the alpha-peptide fragment which is cleaved from the carboxyl terminus of each subunit by protease activation. Both the site of cleavage and the sequence of the alpha-peptide have been determined by a combination of Edman degradation of the purified peptide and DNA sequence analysis of the gene encoding the oxidase. The cleavage site lies within a sequence of hydrophobic amino acids predicted to form a beta-sheet. Another segment of the alpha-peptide is predicted to form an amphipathic alpha-helix. Quantitative assessment of the amphipathic nature of this alpha-helix (Eisenberg, D. (1984) Annu. Rev. Biochem. 53, 595-623) gives a value very similar to the values for several helical peptides which spontaneously bind to the surface of phospholipid vesicles. From these analyses, we propose that the alpha-peptide may play a role in binding pyruvate oxidase to cell membrane phospholipids in vivo.