Oligonucleotide-directed mutagenesis has been used to replace arginine-47 with glutamate in cytochrome P-450 BM3 from Bacillus megaterium and in its haem domain. The mutant has been characterized by sequencing, mass spectrometry, steady-state kinetics and by optical and NMR measurements of substrate binding. The mutant retains significant catalytic activity towards C12-C16 fatty acids, catalysing hydroxylation in the same (omega-1, omega-2, omega-3) positions with kcat/Km values a factor of 14-21 lower. C12-C16 alkyl trimethylammonium compounds are relatively poor substrates for the wild-type enzyme, but are efficiently hydroxylated by the arginine-47-->glutamate mutant at the omega-1, omega-2 and omega-3 positions, with kcat values of up to 19 s-1. Optical spectroscopy shows that the binding of the C14 and C16 alkyl trimethylammonium compounds to the mutant is similar to that of the corresponding fatty acids to the wild-type enzyme. Paramagnetic relaxation measurements show that laurate binds to the ferric state of the mutant in a significantly different position, 1.5 A closer to the iron, than seen in the wild-type, although this difference is much smaller ( approximately 0.2 A) in the ferrous state of the complex. The binding of a substrate having the same charge as residue 47 to the ferric state of the enzyme is roughly ten times weaker than that of a substrate having the opposite charge (and thus is able to make an ion-pair interaction with this residue). The results are discussed in the light of the three-dimensional structure of the enzyme.