The carboxylation of the pentapeptide substrate, Phe-Leu-Glu-Glu-Ile, by a rat microsomal vitamin K-dependent carboxylase was stimulated two- to threefold at pyridoxal-5'-P concentrations between 0.5 and 1.0 mM. This stimulation was reduced at concentrations higher than 1.0 mM. The Km for the pentapeptide was lowered twofold in the presence of 1 mM pyridoxal-5'-P. The activation by pyridoxal-5'-P is specific, as 1 mM pyridoxal, pyridoxine, pyridoxine-5'-P, pyridoxamine, pyridoxamine-5'-P, or 4-pyridoxic acid did not stimulate the pentapeptide carboxylation rate. All six analogs, as well as formaldehyde and acetaldehyde, inhibited the carboxylation reaction in a concentration-dependent manner. The activation of the carboxylase by pyridoxal-5'-P appeared to be mediated by its direct binding to the enzyme via Schiff base formation. Sodium borohydride reduction of solubilized microsomes in the presence of pyridoxal-5'-P, followed by dialysis to remove unbound material, resulted in a carboxylase preparation with a specific activity twice that of the untreated control microsomes. The derivatized enzyme was not further stimulated by added pyridoxal-5'-P. This derivatized carboxylase could be obtained in the absence of pentapeptide and divalent cations. The stimulation of the carboxylase activity by divalent cations and pyridoxal-5'-P was mediated at separate site(s) on the enzyme. Studies of the NH2-terminal pyridoxalated pentapeptide with both a normal and PLP-modified enzyme, in the presence and absence of PLP, demonstrated competition of the pentapeptide PLP moiety to a PLP site on the enzyme. It was concluded that pyridoxal-5'-P forms a covalent attachment to an epsilon-NH2 of a lysine near the active site of the carboxylase.