Protein synthesis in bacteria involves the formylation and deformylation of the N-terminal methionine. As eukaryotic organisms differ in their protein biosynthetic mechanisms, peptide deformylase, the bacterial enzyme responsible for deformylation, represents a potential target for antibiotic studies. Here we report the crystallization and 2.9 Å X-ray structure solution of the zinc containing Escherichia coli peptide deformylase. While the primary sequence, tertiary structure, and use of coordinated cysteine suggest that E. coli deformylase belongs to a new subfamily of metalloproteases, the environment around the metal appears to have strong geometric similarity to the active sites of the thermolysin family. This suggests a possible similarity in their hydrolytic mechanisms. Another important issue is the origin of the enzyme's specificity for N-formylated over N-acetylated substrates. Based on the structure, the specificity appears to result from hydrogen-bonding interactions which orient the substrate for cleavage, and steric factors which physically limit the size of the N-terminal carbonyl group.