Two proteins, barnase, the extracellular ribonuclease of Bacillus amyloliquefaciens, and barstar, its intracellular inhibitor, are used as a model system for the study of protein folding and protein-protein interactions. Barnase is one of an homologous group of ribonucleases ocurring in both prokaryotes and eukaryotes. Recombinant DNA techniques are being applied with three major aims: (1) to facilitate production of wild type and mutant proteins; (2) to examine the structural and contro sequences of the genes; and (3) to make specific changes in the sequences to test theories of folding and to probe the barnase-barstar interaction. Both proteins can now be obtained from recombinant genes in E. coli where expression of barstar counters the lethal effect of barnase expression. The structures of both proteins and their complex are known. A new crystallographic solution of the structure at 1.5 angstroms resolution has provided new insights. For example, several water molecules seen in the barnase-barstar interface can be seen already bound to free barnase. Several barnase-barstar pairs having complementary mutations in the interface, obtained by an in vivo selective technique, have been crystallized and structures are immiment. Barstar also inhibits a group of RNases from Streptomyces strains. These enzymes are distantly related to arnase with a sequence identity of only 25%. Among themselves, identify ranges from 40% to 70%. The structures of two, RNases Sa and St, are known from work on nonrecombinant material. We now have the structure of a third, RNase Sa2, both alone and in complex with barstar. Overlapping fragments of the gene for RNase St, which is poorly inhibited by barstar, have been cloned, allowing us to correct several errors in its published amino acid sequence. The gene for Sa2 homolog of barstar has now been cloned and sequenced. This protein inhibits all the Streptomyces enzymes but apparently not barnase. The controllable lethality of the barnase gene has been used to advantage in producing a selective general purpose plasmid cloning vector