Thrombin is an allosteric protease controlled through exosites flanking the catalytic groove. Binding of a peptide derived from hirudin (Hir(52-65)) and/or of heparin to these opposing exosites alters catalysis. We have investigated the contribution of subsites S(2)' and S(3)' to this allosteric transition by comparing the hydrolysis of two sets of fluorescence-quenched substrates having all natural amino acids at positions P(2)' and P(3)'. Regardless of the amino acids, Hir(52-65) decreased, and heparin increased the k(cat)/K(m) value of hydrolysis by thrombin. Several lines of evidence have suggested that Glu(192) participates in this modulation. We have examined the role of Glu(192) by comparing the catalytic activity of thrombin and its E192Q mutant. Mutation substantially diminishes the selectivity of thrombin. The substrate with the "best" P(2)' residue was cleaved with a k(cat)/K(m) value only 49 times higher than the one having the "least favorable" P(2)' residue (versus 636-fold with thrombin). Mutant E192Q also lost the strong preference of thrombin for positively charged P(3)' residues and its strong aversion for negatively charged P(3)' residues. Furthermore, both Hir(52-65) and heparin increased the k(cat)/K(m) value of substrate hydrolysis. We conclude that Glu(192) is critical for the P(2)' and P(3)' specificities of thrombin and for the allostery mediated through exosite 1.