To examine the relationship between polypeptide chain synthesis and protein folding, we have constructed a circularly permuted variant of phage T4 lysozyme. The permuted protein begins at residue 37 of the wild-type sequence and ends at residue 36. The normal chain termini are joined by a six-residue linker, Ser-Gly4-Ala. The permuted lysozyme folds efficiently and cleaves bacterial cell walls with normal specific activity. As judged by circular dichroism, UV absorbance, fluorescence, and nuclear magnetic resonance spectroscopy, the permutation causes little change in the structure of the protein. Reversible denaturation experiments show that the permutation reduces the stability of T4 lysozyme only 0.8-1.1 kcal/mol. These results demonstrate that a protein with two domains can be permuted with little change in activity, structure, and stability. The order of chain synthesis, the sequential arrangement of secondary structures, and the position of chain termini with respect to domain boundaries do not determine the protein fold.