Soluble methane mono-oxygenase (sMMO) of Methylococcus capsulatus (Bath) catalyses the O2-dependent and NAD(P)H-dependent oxygenation of methane and numerous other substrates. During purification, the sMMO enzyme complex, which comprises three components and has a molecular mass in excess of 300 kDa, becomes inactivated because of cleavage of just 12 amino acids from the N-terminus of protein B, which is the smallest component of sMMO and the only one without prosthetic groups. Here we have shown that cleavage of protein B, to form the inactive truncated protein B′, continued to occur when intact protein B was repeatedly separated from protein B′ and all detectable contaminants, giving compelling evidence that the protein was cleaved autocatalytically. The rate of autocatalytic cleavage decreased when the residues flanking the cleavage site were mutated, but the position of cleavage was unaltered. Analysis of a series of incremental truncates showed that residue(s) essential for the activity of sMMO, and important in determining the stability of protein B, lay in the region Ser4–Tyr7. Protein B was shown to possess intrinsic nucleophilic activity, which we propose initiates the cleavage reaction via a novel mechanism. Proteins B and B′ were detected in approximately equal amounts in the cell, showing that truncation of protein B is biologically relevant. Increasing the growth-medium copper concentration, which inactivates sMMO, did not alter the extent of in vivo cleavage, therefore the conditions under which cleavage of protein B may fulfil its proposed role as a regulator of sMMO remain to be identified.