The gamma subunit of chloroplast coupling factor 1 (CF1) is susceptible to selective proteolysis when the enzyme is in solution and the epsilon subunit is removed [CF1(-epsilon)]. In spinach thylakoid membranes, rapid cleavage of gamma is dependent on the generation of an electrochemical proton potential. The tryptic cleavage sites within the gamma of oxidized CF1 in illuminated thylakoids as well as of reduced CF1(-epsilon) in solution were determined by N-terminal amino acid sequencing. Two large gamma fragments of 27 000 (gamma 27) and 10 000 (gamma 10) molecular weight were generated by trypsin treatment of membrane-bound CF1. The N-terminal gamma 27 contains amino acids 1-215, and the C-terminal gamma 10 contains 232-323. These polypeptides were tightly associated with the trypsin-resistant core of the enzyme. In contrast, three large gamma fragments were produced by trypsinolysis of reduced CF1(-epsilon). These polypeptides, which were also tightly associated with the trypsin-resistant core, have molecular weights of 7900 (gamma 8), 14 850 (gamma 15), and 10 000 (gamma 10). These fragments contain residues 1-70, 71-204, and 232-323, respectively. The C-terminal gamma 10 fragment generated by trypsin treatment of membrane-bound and soluble CF1 are identical. These results suggest that the gamma subunit of CF1 in illuminated thylakoids resembles that of CF1(-epsilon) With respect to accessibility to proteolytic cleavage. Cleavage of gamma between residues 215 and 232 is sufficient to fully activate the ATPase activity of the enzyme without reduction of the gamma disulfide. In addition, cutting within this region is responsible for loss of affinity for the inhibitory epsilon subunit.