Crystal structures of human and rabbit cytosolic serine hydroxymethyltransferase have shown that Tyr65 is likely to be a key residue in the mechanism of the enzyme. In the ternary complex of Escherichia coli serine hydroxymethyltransferase with glycine and 5-formyltetrahydrofolate, the hydroxyl of Tyr65 is one of four enzyme side chains within hydrogen-bonding distance of the carboxylate group of the substrate glycine. To probe the role of Tyr65 it was changed by site-directed mutagenesis to Phe65. The three-dimensional structure of the Y65F site mutant was determined and shown to be isomorphous with the wild-type enzyme except for the missing Tyr hydroxyl group. The kinetic properties of this mutant enzyme in catalyzing reactions with serine, glycine, allothreonine, D- and L-alanine, and 5,10-methenyltetrahydrofolate substrates were determined. The properties of the enzyme with D- and L-alanine, glycine in the absence of tetrahydrofolate, and 5, 10-methenyltetrahydrofolate were not significantly changed. However, catalytic activity was greatly decreased for serine and allothreonine cleavage and for the solvent alpha-proton exchange of glycine in the presence of tetrahydrofolate. The decreased catalytic activity for these reactions could be explained by a greater than 2 orders of magnitude increase in affinity of Y65F mutant serine hydroxymethyltransferase for these amino acids bound as the external aldimine. These data are consistent with a role for the Tyr65 hydroxyl group in the conversion of a closed active site to an open structure.