Full-length double-stranded DNA copies of the neuraminidase (NA) gene of influenza virus A/Tokyo/3/67 (N2) and a mutant generated in vitro by site-specific, oligonucleotide-directed mutagenesis with a substitution of leucine for tryptophan at position 178 were cloned into an SV40 late replacement expression vector. Indirect immunofluorescence of cells infected with these recombinant vectors showed the presence of NA protein in the cytoplasm and on the surface of infected cells. Cells expressing the wild-type protein showed neuraminidase enzyme activity for both fetuin, a sialated glycoprotein (mol wt = 50,000) and N-acetylneuraminyl lactose, a trisaccharide (mol wt = 600). This enzyme activity was inhibited by 44% toward N-acetylneuraminyl lactose and by 98% toward fetuin by adding anti-NA antibody before substrate. In contrast, cells expressing the mutant NA had no detectable enzyme activity for either substrate. The conserved nature of the tryptophan at position 178 in all known NA strains, its location in the substrate binding pocket in the three-dimensional structure and the lack of activity of the mutant protein indicate that this residue is essential for enzyme activity.