Insertions in surface loops bordering the substrate-binding groove have been shown to play a major role in the interaction of serine proteases with their cognate inhibitors and substrates. In the present study, we investigated the functional role of factor IX insertion loop 256-268, and in particular of residues Asn(264) and Lys(265) therein. To this end, the purified and activated mutants des-(N264,K265)-FIX and FIX-K265A were compared to normal factor IXa with regard to a number of functional properties. The catalytic efficiency of des-(N264,K265)-FIXa and FIXa-K265A toward the amide substrate CH(3)SO(2)-Leu-Gly-Arg-pNA was 2-3-fold increased relative to that of normal factor IXa. Comparison of the activities of normal and mutant factor IXa toward a series of closely related amide substrates indicates that mutation of residues Asn(264)-Lys(265) influences the interactions in the S2-binding site. The mutations in loop 256-268 also increased the susceptibility of factor IXa to antithrombin inhibition by approximately 3-fold. Factor X activation experiments in the absence of factor VIIIa revealed that the catalytic efficiency of des-(N264,K265)-FIXa and FIXa-K265A was about 20 times higher than that of normal factor IXa. In the presence of factor VIIIa, however, the activity toward factor X was similar to that of normal factor IXa. The reduced sensitivity of the factor IXa mutants to factor VIIIa was neither due to an increase in factor IXa-dependent inactivation of factor VIIIa, nor to a lower affinity for this cofactor. Overall, these data demonstrate that loop 256-268 restricts the activity of factor IXa toward both synthetic and natural substrates. Complex formation with factor VIIIa alleviates the inhibitory effect of this insertion loop on the activation of FX.