Sterol methyltransferase (SMT), the enzyme from Saccharomyces cerevisiae that catalyzes the conversion of sterol acceptor in the presence of AdoMet to C-24 methylated sterol and AdoHcy, was analyzed for amino acid residues that contribute to C-methylation activity. Site-directed mutagenesis of nine aspartate or glutamate residues and four histidine residues to leucine (amino acids highly conserved in 16 different species) and expression of the resulting mutant proteins in Escherichia coli revealed that residues at H90, Asp125, Asp152, Glu195, and Asp276 are essential for catalytic activity. Each of the catalytically impaired mutants bound sterol, AdoMet, and 25-azalanosterol, a high energy intermediate analogue inhibitor of C-methylation activity. Changes in equilibrium binding and kinetic properties of the mutant enzymes indicated that residues required for catalytic activity are also involved in inhibitor binding. Analysis of the pH dependence of log kcat/Km for the wild-type SMT indicated a pH optimum for activity between 6 and 9. These results and data showing that only the mutant H90L binds sterol, AdoMet, and inhibitor to similar levels as the wild-type enzyme suggest that H90 may act as an acceptor in the coupled methylation-deprotonation reaction. Circular dichroism spectra and chromatographic information of the wild-type and mutant enzymes confirmed retention of the overall conformation of the enzyme during the various experiments. Taken together, our studies suggest that the SMT active center is composed of a set of acidic amino acids at positions 125, 152, 195, and 276, which contribute to initial binding of sterol and AdoMet and that the H90 residue functions subsequently in the reaction progress to promote product formation.