The haemolysin of Serratia marcescens (ShlA) is translocated through the cytoplasmic membrane by the signal peptide-dependent export apparatus. Translocation across the outer membrane (secretion) is mediated by the ShIB protein. Only the secreted form of ShlA is haemolytic. ShIB also converts in vitro inactive ShlA (ShlA*), synthesized in the absence of ShIB, into the haemolytic form (a process termed activation). To define regions in ShlA involved in both processes, ShlA derivatives were isolated and tested for secretion and activation. Analysis of C-terminally truncated proteins (ShlA) assigned the secretion signal to the amino-terminal 238 residues of ShlA. Trypsin cleavage of a secreted ShlA' derivative yielded a 15kDa N-terminal fragment, by which a haemolytically inactive ShlA* protein could be activated in vitro. It is suggested that the haemolysin activation site is located in this N-terminal fragment. Replacement of asparagine-69 and asparagine-109 by isoleucine yielded inactive haemolysin derivatives. Both asparagine residues are part of two short sequence motifs, reading Ala-Asn-Pro-Asn, which are critical to both activation and secretion. These point mutants as well as N-terminal deletion derivatives which were not activated by ShIB were activated by adding a non-haemolytic N-terminal fragment synthesized in an ShIB+ strain (complementation). Apparently the activated N-terminal fragment substituted for the missing activation of the ShlA derivatives and directed them into the erythrocyte membrane, where they formed pores. It is concluded that activation is only required for initiation of pore formation, and that in vivo activation and secretion are tightly coupled processes. Complementation may also indicate that haemolysin oligomers form the pores.