In this study we examine for the first time the roles of the various domains of human RNase H1 by site-directed mutagenesis. The carboxyl terminus of human RNase H1 is highly conserved with Escherichia coli RNase H1 and contains the amino acid residues of the putative catalytic site and basic substrate-binding domain of the E. coli RNase enzyme. The amino terminus of human RNase H1 contains a structure consistent with a double-strand RNA (dsRNA) binding motif that is separated from the conserved E. coli RNase H1 region by a 62-amino acid sequence. These studies showed that although the conserved amino acid residues of the putative catalytic site and basic substrate-binding domain are required for RNase H activity, deletion of either the catalytic site or the basic substrate-binding domain did not ablate binding to the heteroduplex substrate. Deletion of the region between the dsRNA-binding domain and the conserved E. coli RNase H1 domain resulted in a significant loss in the RNase H activity. Furthermore, the binding affinity of this deletion mutant for the heteroduplex substrate was approximately 2-fold tighter than the wild-type enzyme suggesting that this central 62-amino acid region does not contribute to the binding affinity of the enzyme for the substrate. The dsRNA-binding domain was not required for RNase H activity, as the dsRNA-deletion mutants exhibited catalytic rates approximately 2-fold faster than the rate observed for wild-type enzyme. Comparison of the dissociation constant of human RNase H1 and the dsRNA-deletion mutant for the heteroduplex substrate indicates that the deletion of this region resulted in a 5-fold loss in binding affinity. Finally, comparison of the cleavage patterns exhibited by the mutant proteins with the cleavage pattern for the wild-type enzyme indicates that the dsRNA-binding domain is responsible for the observed strong positional preference for cleavage exhibited by human RNase H1.