Magnetotactic bacteria contain nanometre-sized, membrane-bound organelles, called magnetosomes, which are tasked with the biomineralization of small crystals of the iron oxide magnetite allowing the organism to use geomagnetic field lines for navigation. A key player in this process is the HtrA/DegP family protease MamE. In its absence, Magnetospirillum magneticum str AMB-1 is able to form magnetosome membranes but not magnetite crystals, a defect previously linked to the mislocalization of magnetosome proteins. In this work we use a directed genetic approach to find that MamE, and another predicted magnetosome-associated protease, MamO, likely function as proteases in vivo. However, as opposed to the complete loss of mamE where no biomineralization is observed, the protease-deficient variant of this protein still supports the initiation and formation of small, 20 nm-sized crystals of magnetite, too small to hold a permanent magnetic dipole moment. This analysis also reveals that MamE is a bifunctional protein with a protease-independent role in magnetosome protein localization and a protease-dependent role in maturation of small magnetite crystals. Together, these results imply the existence of a previously unrecognized ‘checkpoint’ in biomineralization where MamE moderates the completion of magnetite formation and thus committal to magneto-aerotaxis as the organism's dominant mode of navigating the environment.