We present evidence that cysteine 269 of the small subunit of Escherichia coli carbamyl phosphate synthetase is essential for the hydrolysis of glutamine. When cysteine 269 is replaced with glycine or with serine by site-directed mutagenesis of the carA gene, the resulting enzymes are unable to catalyze carbamyl phosphate synthesis with glutamine as nitrogen donor. Even though the glycine 269, and particularly the serine 269 enzyme bind significant amounts of glutamine, neither glycine 269 nor serine 269 can hydrolyze glutamine. The mutations at cysteine 269 do not affect carbamyl phosphate synthesis with NH3 as substrate. The NH3-dependent activity of the mutant enzymes was equal to that of wild-type. Measurements of Km indicate that the enzyme uses unionized NH3 rather than ammonium ion as substrate. The apparent Km for NH3 of the wild-type enzyme is calculated to be about 5 mM, independent of pH. The substitution of cysteine 269 with glycine or with serine results in a decrease of the apparent Km value for NH3 from 5 mM with the wild-type to 3.9 mM with the glycine, and 2.9 mM with the serine enzyme. Neither the glycine nor the serine mutation at position 269 affects the ability of the enzyme to catalyze ATP synthesis from ADP and carbamyl phosphate. Allosteric properties of the large subunit are also unaffected. However, substitution of cysteine 269 with glycine or with serine causes an 8- and 18-fold stimulation of HCO-3 -dependent ATPase activity, respectively. The increase in ATPase activity and the decrease in apparent Km for NH3 provide additional evidence for an interaction of the glutamine binding domain of the small subunit with one of the two known ATP sites of the large subunit.