11beta-Hydroxysteroid dehydrogenase type 1 is a homodimer where the carboxyl terminus of one subunit covers the active site of the dimer partner. Based on the crystal structure with CHAPS, the carboxyl terminal tyrosine 280 (Y280) has been postulated to interact with the substrate/inhibitor at the binding pocket of the dimer partner. However, the co-crystal structure with carbenoxolone argues against this role. To clarify and reconcile these findings, here we report our mutagenesis data and demonstrate that Y280 is not involved in substrate binding but rather plays a selective role in inhibitor binding. The involvement of Y280 in inhibitor binding depends on the inhibitor chemical structure. While Y280 is not involved in the binding of carbenoxolone, it is critical for the binding of glycyrrhetinic acid.