Since the inception of recombinant DNA technology, different strategies have been developed in the isolation, renaturation, and native disulfide bond formation of proteins produced as insoluble inclusion bodies in Escherichia coli. One of the major challenges in optimizing renaturation processes is to prevent the formation of off-pathway inactive and aggregated species. On the basis of a simplified kinetic model describing the competition between folding and aggregation, it was possible to analyze the effects of denaturant and thiol/disulfide concentrations on this competition. Although higher guanidinium chloride (GdmCl) concentrations resulted in higher renaturation yields, the folding rate was negatively affected, indicating an optimum range of GdmCl for optimum renaturation rates and yields. Similarly, higher total glutathione concentrations resulted in higher yields but decreased rates, also indicating an optimum total glutathione concentration for optimum renaturation rates and yields (6-16 mM), with an optimum ratio of reduced to oxidized glutathione between 1 and 3. To characterize the nature of aggregates, aggregation experiments were performed under different oxidizing/reducing conditions. It is shown that hydrophobic interactions between partially folded polypeptide chains are the major cause of aggregation. Aggregation is fast and aggregate concentration does not significantly increase beyond the first minute of renaturation. Under conditions which promote disulfide bonding, aggregate size, but not concentration, may increase due to disulfide bond formation, resulting in covalently bonded aggregates.