The finding that the activity of the multicatalytic proteinase complex (MPC) is greatly activated by low concentrations of sodium dodecyl sulfate (SDS) and fatty acids led to the proposal that the proteolytic activity of the complex is latent and that activation is needed for expression of full activity. Kinetic examination of the nature of the latency with Cbz-Leu-Leu-Glu-2-naphthylamide, a substrate cleaved by the peptidylglutamyl-peptide hydrolyzing activity (PGPH activity) of the complex, showed that plots of velocity versus substrate concentration yield sigmoidal curves, implying the presence of two or more substrate binding sites and the presence of cooperative interactions between the sites. Hill plots of log [upsilon/(V(max) - upsilon)] versus log [S] gave slopes with a Hill coefficient of 2.2-2.4, suggesting that more than two subunits are expressing the PGPH activity. At saturating substrate concentrations, SDS and lauric acid exposed a masked component of PGPH activity that was about equal in magnitude to the overt activity measured in the absence of these detergents, showing that under the latter conditions only about half of the enzyme activity is expressed. Activation by SDS and lauric acid was greater at low than at high substrate concentrations and was associated with a shift of the substrate concentration at half-V(max) (apparent K(m) toward lower values. The decrease in the apparent K(m) in the presence of SDS (but not in the presence of lauric acid) was associated with a decrease in cooperativity. The presence of at least two distinct PGPH activity components with different reactivities was also indicated by the finding of two distinct inactivation rate constants in reactions with 3,4-dichloroisocoumarin, an irreversible inhibitor of the enzyme. About 80% of the overt activity was inactivated with a rapid second-order rate constant, while the remainder was inactivated at a slower rate that was equal to the rate of inactivation of the masked activity exposed by SDS. The PGPH activity of the MPC was strongly inhibited by low concentrations (10(-6) - 10(-7) M) of protein present in pituitary homogenates and also by beta-casein, lysozyme, and bovine serum albumin. Binding of these proteins to the enzyme caused a concentration-dependent shift of the S-shaped substrate saturation curves with an increase in apparent K(m) without change in maximal velocity, a finding that could indicate negative allosteric effects or competitive inhibition. It is concluded that cooperative interactions between more than two subunits of the complex determine the expression of the PGPH activity of the MPC and that full expression of this activity results from conformational changes induced by SDS or lauric acid binding at a site or sites (allosteric sites) different from the substrate binding site. These phenomena are in a major way responsible for the apparent "latency" of the MPC.