The gene encoding p-hydroxybenzoate hydroxylase from Pseudomonas fluorescens was cloned in Escherichia coli to provide DNA for mutagenesis studies on the protein product. A plasmid containing a 1.65-kbp insert of P. fluorescens chromosomal DNA was obtained and its nucleotide sequence determined. The DNA-derived amino acid sequence agrees completely with the chemically determined amino acid sequence of the isolated protein. The enzyme is strongly expressed under influence of the vector-encoded lac promotor and is purified to homogeneity in a simple three-step procedure. The relation between substrate binding, the effector role of substrate and hydroxylation efficiency was studied by use of site-directed mutagenesis. Arg214, in ion-pair interaction with the carboxy moiety of p-hydroxybenzoate, was replaced with Lys, Gln and Ala, respectively. The affinity of the free enzymes for NADPH is unchanged, whereas the affinity for the aromatic substrate is strongly decreased. For enzymes Arg214-->Ala and Arg214-->Gln, the effector role of substrate is lost. For enzyme Arg214-->Lys, binding of p-hydroxybenzoate highly stimulates the rate of flavin reduction. In the presence of substrate or substrate analogues, the reduced enzyme Arg214-->Lys fails to stabilize the 4 alpha-hydroperoxyflavin intermediate, essential for efficient hydroxylation. Like the wild-type, enzyme Arg214-->Lys is susceptible to substrate inhibition. From spectral and kinetic results it is suggested that secondary binding of the substrate occurs at the re side of the flavin, where the nicotinamide moiety of NADPH is supposed to bind.