The mechanism of yeast glycogen phosphorylase activation by covalent phosphorylation involves structural elements distinct from the mammalian homologs. To understand the role of the amino-terminal 39-residue extension in the phosphorylation control mechanism, mutants with 22 and 42 amino-terminal residues removed were expressed in Escherichia coli, and their properties were compared with the wild-type (WT) enzyme. The unphosphorylated WT enzyme had a specific activity of 0.1 unit/mg and was not activated significantly by the substrate, glucose 1-phosphate. Phosphorylation by protein kinase resulted in a 1300-fold activation. Glucose 6-phosphate inhibited the unphosphorylated enzyme more effectively than the phosphorylated form, and inhibition of the latter was cooperative. Glucose was a poor inhibitor for both the unphosphorylated and phosphorylated WT enzyme with Ki > 300 mM. The rate of phosphorylation by protein kinase depended on substrates and interactions of the amino terminus. Maltoheptaose increased the rate of phosphorylation of the WT enzyme by yeast phosphorylase kinase 5-fold. The 22-residue deletion mutant (Nd22) had overall kinetic properties similar to the WT enzyme, except that Nd22 was a better substrate for the protein kinase and the rate of phosphorylation was unaffected by maltoheptaose. The 42-residue deletion mutant (Nd42), which lacks the phosphorylation site, was measurably active, although much less active than phosphorylated WT. Sedimentation equilibrium analysis indicated that the WT, Nd22, and Nd42 exist as tetramer, partially dissociated tetramer, and dimer, respectively. Phosphorylation of the WT and Nd22 converted both to dimer. The results indicated that the amino terminus affects quaternary structure and mediates activity regulation through conformational transition.