In vivo alpha-complementation of beta-galactosidase was demonstrated in 16 Z gene terminator (nonsense) mutant strains of Escherichia coli upon introduction of the episome F'M15 which specifies production of a mutant Z gene polypeptide containing a small deletion in the N-terminal region of the enzyme monomer. Genetic and biochemical analyses of the merodiploids showed that restoration of enzyme activity was due to their terminator/F'M15 genetic constitution resulting in the production of two enzymatically inactive polypeptides which associate in vivo to reconstitute active, stable beta-galactosidase. The prematurely terminated polypeptide fragments known to be rapidly degraded in haploid cells were shown by phenotypic and biochemical studies to be stabilized (i.e., protected) in merodiploids by formation of complemented enzyme complexes with the M15 protein. Phenotypic properties of complementing diploids are described and are discussed in relation to in vitro determination of beta-galactosidase activity.