Anion exchange chromatography of reticulocyte lysates revealed that the ubiquitin cell-free system can be resolved into two essential fractions: unadsorbed material (Fraction I) that contains ubiquitin and a high salt eluate (Fraction II) that contains the conjugating enzymes and the conjugate-degrading protease. Many proteins with exposed NH2 termini are degraded in a ubiquitin-supplemented Fraction II. However, this partially purified and reconstituted system does not degrade N-alpha-acetylated proteins. These proteins are degraded in whole lysates in a ubiquitin-dependent manner (Mayer, A. Siegel, N. R., Schwartz, A. L., and Ciechanover, A. (1989) Science 244, 1480-1483). It appears that a protein factor which is specifically required for the degradation of N-alpha-acetylated proteins is removed or inactivated during the fractionation of the lysate. Here we report the purification and characterization of a novel protein that is required along with the protease for the degradation of ubiquitin conjugates of histone H2A, an N-alpha-acetylated protein. The protein is not required for the degradation of ubiquitin conjugates of proteins with free NH2 termini. The protein, which is found in crude Fraction I, was purified approximately 200-fold by (NH4)2SO4 precipitation, Sephadex G-100 gel-filtration chromatography, Mono Q anion exchange chromatography, and an additional Sephadex G-100 gel filtration chromatography step. The protein is removed from Fraction I during the purification of ubiquitin and has not been previously recognized since the majority of the protein substrates evaluated in the cell-free system have free NH2 termini. The protein has an apparent molecular mass of approximately 92 kDa. It is a homodimer that is composed of two identical 46-kDa subunits. Initial analysis of the mechanism of action of this protein revealed that it must interact with the conjugates in order to allow proteolysis to occur. We designated the protein Factor H (Factor Hedva).