The catalytic subunit of pyruvate dehydrogenase phosphatase 1 (PDP1c) is a magnesium-dependent protein phosphatase that regulates the activity of mammalian pyruvate dehydrogenase complex. Based on the sequence analysis, it was hypothesized that PDP1c is related to the mammalian magnesium-dependent protein phosphatase type 1, with Asp54, Asp347, and Asp445 contributing to the binuclear metal-binding center, and Asn49 contributing to the phosphate-binding sites. In this study, we analyzed the functional significance of these amino acid residues using a site-directed mutagenesis. It was found that substitution of each of these residues had a significant impact on PDP1c activity toward the protein substrate. The activities of Asp54, Asp347, and Asp445 mutants were decreased more than 1000-fold. The activity of Asn49 mutant was 2.5-fold lower than the activity of wild-type PDP1c. The decrease in activity of Asp54 and Asp347 came about, most likely, as a result of impaired magnesium binding. Unexpectedly, it was found that the Asp445 mutant bound Mg2+ ions similarly to the wild-type enzyme. Accordingly, the Asp445 mutant was found to be active with the artificial substrate p-nitrophenyl phosphate (pNPP). Asp54 and Asp347 mutants did not demonstrate any appreciable activity with pNPP. Together, these observations strongly suggest that Asn49, Asp54, and Asp347 are important for the catalysis of the phosphatase reaction, contributing to the phosphate- and metal-binding centers of PDP1c. In contrast, Asp445 is not required for catalysis. The exact role of Asp445 remains to be established, but indirect evidence suggests that it might be involved in the control of interactions between PDP1c and the protein substrate pyruvate dehydrogenase. © 2004 Elsevier B.V. All rights reserved.