The proteasome activator PA28 (11S REG) is composed of two homologous subunits termed alpha and beta. The properties of the recombinant beta-subunit were explored and compared to the properties of the recombinant alpha-subunit. PA28beta produced in an Escherichia coli expression system migrates on a calibrated gel filtration column as an apparent heptamer (Mr = 250,000). Low concentrations of SDS (0.005%), dissociate the protein to a monomer (Mr = 33,000). PA28beta, has a complex effect on proteasome activity. At concentrations which favor oligomerization (> 2 microM), PA28beta is a strong proteasome activator although its affinity for the proteasome is about 10-fold less than recombinant PA28alpha. The catalytic properties of the PA28alpha and PA28beta-activated proteasome are similar. At low concentrations, PA28beta is a monomer and a potent allosteric proteasome inhibitor. These studies show that oligomerization of PA28beta is required for proteasome activation and that PA28beta monomers are potent proteasome inhibitors.