The selective carboxymethylation by iodoacetate of Cys-46 in the active center of horse liver alcohol dehydrogenase has been shown to be mediated by interaction of the anionic reagent with the arginyl residue(s) previously shown to be responsible for binding NADH (L.G. Lange, J.F. Riordan, and B.L. Vallee (1974), Biochemistry 13, 4361). Thus, sequential and reversible chemical modification of arginine with butanedione and of cysteine with pmercuribenzoate demonstrate that the essential thiol groups are not affected by arginine modification. Importantly, the rate of incorporation of [14C]idoacetate into native horse liver alcohol dehydrogenase is ten times faster than that for the butanedione-modified enzyme. Moreover, as evidenced by peptide isolation, the radiolabel incorporated into the latter occurs at low levels in several different peptides as opposed to the single, strongly labeled CmCys-46 peptide obtained from the native enzyme. The demonstration that the arginyl residue(s) involved in coenzyme binding promotes enhanced reactivity of the active site thiol supports the general hypothesis that the spatial arrangement of structural features allowing expression of enzymatic function may also account for enhanced chemical reactivity of certain active site residues (B.L Vallee and J.F. Riordan (1969), Annu. Rev. Biochem. 38, 733).