The transport properties of the uncoupling protein (UCP) from brown adipose tissue have been studied in mutants where Cys304 has been replaced by either Gly, Ala, Ser, Thr, Ile or Trp. This position is only two residues away from the C-terminus of the protein, a region that faces the cytosolic side of the mitochondrial inner membrane. Mutant proteins have been expressed in Saccharomyces cerevisiae and their activity determined in situ by comparing yeast growth rates in the presence and absence of 2-bromopalmitate. Their bioenergetic properties have been studied in isolated mitochondria by determining the effects of fatty acids and nucleotides on the proton permeability and NADH oxidation rate. It is revealed that substitution of Cys304 by non-charged residues alters the response of UCP to fatty acids. The most effective substitution is Cys for Gly since it greatly enhances the sensitivity to palmitate, decreasing threefold the concentration required for half-maximal stimulation of respiration. The opposite extreme is the substitution by Ala which increases twofold the half-maximal concentration. We conclude that the C-terminal region participates in the fatty acid regulation of UCP activity. The observed correlation between yeast growth rates in the presence of bromopalmitate and the calculated activation constants for respiration in isolated mitochondria validates growth analysis as a method to screen the in situ activity of UCP mutants.