Protein-based cellular therapeutics have been limited by getting molecules into cells and the fact that many proteins require post-translational modifications for activation. Protein transduction domains (PTDs), including that from the HIV TAT protein (TAT), are small arginine rich peptides that carry molecules across the cell membrane. We have shown that the heat shock-related protein, HSP20 is a downstream-mediator of cyclic nucleotide-dependent relaxation of vascular smooth muscle and is activated by phosphorylation. In this study, we co-expressed in Escherichia coli the cDNAs encoding the catalytic subunit of protein kinase G and a TAT-HSP20 fusion protein composed of the TAT PTD (-YGRKKRRQRRR-) fused to the N-terminus of human HSP20. Immunoblot and HPLGESI-MS/MS analysis of the purified TAT-HSP20 demonstrated that it was phosphorylated at serine 40 (equivalent to serine 16 in wild-type human HSP20). This phosphorylated TAT-HSP20 was physiologically active in intact smooth muscles in that it inhibited 5-hydroxytryptamine-induced contractions by 57% +/- 4.5. The recombinant phosphorylated protein also led to changes in actin cytoskeletal morphology in 3T3 cells. These results delineate strategies for the expression and activation of therapeutic molecules for intracellular protein based therapeutics. Published by Elsevier Inc.