Isozyme type 1 of alkaline phosphatase in Escherichia coli K-12 was converted to types 2 and 3 after incubation of type 1 isozyme with the supernatant of a sonicated cell-free extract prepared from the cells carrying the cloned iap+ gene on a multi-copy plasmid. By comparison, the lysate prepared from cells carrying the iap+ gene only on the chromosome showed much less isozyme-converting activity. The reaction was promoted by Mg2+ at concentrations of 10 to 50 mM. Protease inhibitors, antipain and leupeptin which inhibit the isozyme conversion in vivo, also inhibited the isozyme conversion in vitro. These results suggest that cells carrying the multiple copy iap+ plasmid overproduce a kind of proteolytic enzyme which removes the amino-terminal arginine residues from isozymes 1 and 2.