The mechanism of substrate inhibition of rabbit skeletal muscle fructose-1.6-bisphosphatase was examined. Analysis of substrate saturation curves obtained at different concentrations of Mg2+ revealed that the inhibiting effect of the substrate is manifested only within the complex with Mg2+, whereas the free form of the substrate causes no inhibition. Evidence for the allosteric nature of substrate inhibition was obtained by partial desensitization of the enzyme in the presence of salicylates. It was shown that fructose-1.6-bisphosphatase inhibition by the substrate obeys positively cooperative kinetics and is noncompetitive with respect to the substrate involved in the catalytic process. Studies on enzyme modification in the presence of DTNB and pyridoxal-5'-phosphate demonstrated that the inhibiting concentrations of the substrate are bound to the center which differs from the allosteric site for AMP. It is suggested that the antagonism of simultaneous action of AMP and high substrate concentrations may be due to the competition of the phosphate groups of these ligands for binding to the common lysine residue located in the overlapping region of two allosteric sites.