To investigate the biochemical properties of the protease encoded by the human endogenous retrovirus, K10 (HERV-K), 213 amino acids of the 3'-end of the HERV-K protease (PR) open reading frame were expressed in Escherichia coli. Autocatalytic cleavage of the expressed polypeptide resulted in an 18.2 kDa protein which was shown to be proteolytically active against a fluorogenic peptide used as a substrate for HIV-1 protease. On the basis of sequence homology and molecular modeling, the 106 N-terminal amino acids of HERV-K PR were predicted to comprise a retroviral protease core domain. An 11.6 kDa protein corresponding to this region was expressed and shown to be a fully functional enzyme. The 11.6 kDa domain of HERV-K PR is unusually stable over a wide pH range, exhibits optimal catalytic activity between pH 4.0 and 5.0, and exists as a dimer at pH 7.0 with a Kd of 50 microM. Like HIV-1 PR, the HERV-K PR core domain is activated by high salt concentrations and processes HIV-1 matrix-capsid polyprotein at the authentic HIV-1 PR recognition site. However, both the 18.2 and 11.6 kDa forms of HERV-K PR were highly resistant to a number of clinically useful HIV-1 PR inhibitors, including ritonavir, indinavir, and saquinavir. This raises the possibility that HERV-K PR may complement HIV-1 PR during infection, and could have implications for protease inhibitor therapy and drug resistance.