Interleukin-18 (IL-18) is a pro-inflammatory cytokine, and IL-18-binding protein (IL-18BP) is a naturally occurring protein that binds IL-18 and neutralizes its biological activities. Computer modeling of human IL-18 identified two charged residues, Glu-42 and Lys-89, which interact with oppositely charged amino acid residues buried in a large hydrophobic pocket of IL-18BP. The cell surface IL-18 receptor alpha chain competes with IL-18BP for IL-18 binding, although the IL-18 receptor alpha chain does not share significant homology to IL-18BP. In the present study, Glu-42 was mutated to Lys and Lys-89 to Glu; Glu-42 and Lys-89 were also deleted separately. The deletion mutants (E42X and K89X) were devoid of biological activity, and the K89E mutant lost 95% of its activity. In contrast, compared with wild-type (WT) IL-18, the E42K mutant exhibited a 2-fold increase in biological activity and required a 4-fold greater concentration of IL-18BP for neutralization. The binding of WT IL-18 and its various mutants to human natural killer cells was evaluated by competition assays. The mutant E42K was more effective than WT IL-18 in inhibiting the binding of (125)I-IL-18 to natural killer cells, whereas the three inactive mutants E42X, K89E, and K89X were unable to compete with (125)I-IL-18 for binding. Similarly, WT IL-18 and the E42K mutant induced degradation of Ikappa-Balpha, whereas the three biologically inactive mutants did not induce degradation. The present study reveals that Glu-42 and Lys-89 are critical amino acid residues for the integrity of IL-18 structure and are important for binding to cell surface receptors, for signal transduction, and for neutralization by IL-18BP.