Insulin-like growth factor 1 (IGF1), a therapeutic protein, is highly homologous to proinsulin in 3-dimensional structure. To highly express IGF1 in recombinant Escherichia coli, IGF1 was engineered to be fused with the 6-lysine tag and ubiquitin at its N-terminus (K6Ub-IGF1). Fed-batch fermentation of E. coli TG1/pAPT-K6Ub-IGF1 resulted in 60.8 g/L of dry cell mass, 18% of which was inclusion bodies composed of K6Ub-IGF1. Subsequent refolding processes were conducted using accumulated inclusion bodies. An environment of 50 mM bicine buffer (pH 8.5), 125 mM L-arginine, and 4 °C was chosen to optimize the refolding of K6Ub-IGF1, and 240 mg/L of denatured K6Ub-IGF1 was refolded with a 32% yield. The positive effect of L-arginine on K6Ub-IGF1 refolding might be ascribed to preventing unfolded K6Ub-IGF1 from undergoing self-aggregation and thus increasing its solubility. The simple dilution refolding, followed by cleavage of the fusion protein by site-specific UBP1 and chromatographic purification of IGF1, led production of authentic IGF1 with 97% purity and an 8.5% purification yield, starting from 500 mg of inclusion bodies composed of K6Ub-IGF1, as verified by various analytical tools, such as RP-HPLC, CD spectroscopy, MALDI-TOF mass spectrometry, and Western blotting. Thus, it was confirmed that L-arginine with an aggregation-protecting ability could be applied to the development of refolding processes for other inclusion body-derived proteins.