The three-dimensional structure of the quaternary complex of Saccharomyces cerevisiae transketolase, thiamin diphosphate, Ca2+, and the acceptor substrate erythrose-4-phosphate has been determined to 2.4 A resolution by protein crystallographic methods. Erythrose-4-phosphate was generated by enzymatic cleavage of fructose-6-phosphate. The overall structure of the enzyme in the quaternary complex is very similar to the structure of the holoenzyme; no large conformational changes upon substrate binding were found. The substrate binds in a deep cleft between the two subunits. The phosphate group of the substrate interacts with the side chains of the conserved residues Arg359, Arg528, His469, and Ser386 at the entrance of this cleft. The aldehyde moiety of the sugar phosphate is located in the vicinity of the C-2 carbon atom of the thiazolium ring of the cofactor. The aldehyde oxygen forms hydrogen bonds to the side chains of the residues His30 and His263. One of the hydroxyl groups of the sugar phosphate forms a hydrogen bond to the side chain of Asp477. The preference of the enzyme for donor substrates with D-threo configuration at the C-3 and C-4 positions and for alpha-hydroxylated acceptor substrates can be understood from the pattern of hydrogen bonds between enzyme and substrate. Amino acid replacements by site-directed mutagenesis of residues Arg359, Arg528, and His469 at the phosphate binding site yield mutant enzymes with considerable residual catalytic activity but increased Km values for the donor and in particular acceptor substrate, consistent with a role for these residues in phosphate binding. Replacement of Asp477 by alanine results in a mutant enzyme impaired in catalytic activity and with increased Km values for donor and acceptor substrates. These findings suggest a role for this amino acid in substrate binding and catalysis.