Individual residues important for ligand binding and catalytic activity were identified by computer modeling and investigated by site-directed mutagenesis for catalytic antibody 43C9, which accelerates amide hydrolysis by a factor of 10(6). On the basis of a computer model, Tyr L32, His L91, Arg L96, His H35, and Tyr H95 were chosen for replacement by site-directed mutagenesis. To facilitate these studies, an expression system was developed in which properly folded 43C9 single-chain antibody was secreted from an engineered Escherichia coli host. Substitution of His L91 by Gln produced a mutant with no catalytic activity, but whose affinities for ligands were nearly the same as those of the wild-type, identifying His L91 as the nucleophile that forms the acyl intermediate implicated by previous kinetic studies. Arg L96 is also critical for catalytic activity and appears to function as a oxyanion hole for the tetrahedral transition states. Two substitutions for His H35 resulted in mutant proteins with no catalytic activity as well as altered affinities for ligands, indicating an important structural role for this residue. Substitutions for Tyr L32 and Tyr H95 were made in an attempt to improve the catalytic efficiency of 43C9. The results of these mutations allow us to propose a mechanism for 43C9-catalyzed hydrolysis: Substrate binding to 43C9 orients the scissile carbonyl group adjacent to both the His L91 and Arg L96 side chains. The imidazole of His L91 acts as a nucleophile, forming an acyl-antibody intermediate that breaks down by hydroxide attack to afford the products and regenerate the catalyst.