The FtsH (HflB) protein of Escherichia coli is a membrane-bound ATP-dependent zinc protease. The role(s) of the N-terminal membrane-anchoring region of FtsH were studied by fusion with a maltose-binding protein (MBP) at five different N-termini of FtsH. The MBP-FtsH fusions were expressed in the cytoplasm of E. coli, and were purified as soluble proteins. The four longer constructs, which have a second transmembrane segment and the C-terminal cytoplasmic region in common, retained ATP-dependent protease activity toward heat-shock transcription factor sigma(32), and were found to be homo-oligomers. In contrast, the shortest construct which has the C-terminal cytoplasmic region but not the second transmembrane segment showed neither protease activity nor oligomerization. Therefore, the second transmembrane segment, which neighbors the C-terminal cytoplasmic region of the FtsH, participates in not only its membrane-anchoring, but also its protease activity and homo-oligomerization.