The periplasmic fates of misfolded MalE31, a defective folding mutant of the maltose-binding protein, were determined by manipulating two cellular activities affecting the protein folding pathway in host cells: (i) the malEp promoter activity, which is controlled by the transcriptional activator MalT, and (ii) the DegP and Protease III periplasmic proteolytic activity. At a low level of expression, the degradation of misfolded MalE31 was partially impaired in cells lacking DegP or Protease III. At a high level of expression, misfolded MalE31 rapidly formed periplasmic inclusion bodies and thus escaped degradation, However, the manipulated host cell activities did not enhance the production of periplasmic, soluble MalE31. A kinetic competition between folding, aggregation, and degradation is proposed as a general model for the biogenesis of periplasmic proteins.