Cephamycin C-producing microorganisms contain a two-protein enzyme system that converts cephalosporins to 7-methoxycephalosporins. interaction between the two component proteins P-7 (M(r) 27,000) and P-8 (M(r) 32,000) has been studied by immunoaffinity chromatography using anti-P-7 and anti-P-8 antibodies, cross-linking with glutaraldehyde, and fluorescence spectroscopy analysis. Co-renaturation of the P-7 and P-8 polypeptides resulted in the formation of a protein complex with a molecular mass of 59 kDa, which corresponds to a heterodimer of P-7 and P-8. Glutaraldehyde cross-linking of the polypeptides after assembly of the protein complex showed the presence of a single heterodimer form that reacted with antibodies against P-7 and P-8. Each separate protein did not associate with itself into multimers. The P-7 . P-8 complex co-purified by immunoaffinity chromatography from extracts of Nocardia lactamdurans and Streptomyces clavuligerus, suggesting that both proteins are present as an aggregate in vivo. Fluorescence spectroscopy studies of 5-methylaminonaphthalene-1-sulfonyl-P-7 in response to increasing concentrations of P-8 showed a blue shift in the fluorophore emission, indicating a conformational change of P-7 in response to the interaction of P-8 with an apparent dissociation constant of 47 mu M. NADH showed affinity for the P-7 component. The P-7 . P-8 complex interacted strongly with the substrates S-adenosylmethionine and cephalosporin C, differently from that occurring with the separate P-7 or P-8 components, resulting in a strong blue shift in the fluorescence emission spectra of the complex.