Chemical modification of the γ-carboxyglutamyl (Gla) residues of bovine prothrombin fragment 1 using the formaldehyde-morpholine method in the presence of 100 K(m)(app) Tb3+ ions at pH 5.0 provided a modified protein containing 3 γ-methyleneglutamyl residues (γ-MGlu) and 7 Gla residues (bovine 3-γ-MGlu-fragment 1). The modified protein bound the same number of Ca2+ ions as the native protein (six to seven), exhibited 28Mg2+-binding properties identical to native fragment 1 (five Mg2+ ions bound), exhibited the metal ion-promoted quenching of the intrinsic fluorescence in a manner similar to the native protein, but did not bind to phosphatidylserine (PS)/phosphatidylcholine (PC) vesicles in the presence of Ca2+ ions. Modification of the bovine protein using [14C]formaldehyde-morpholine provided a 14C-labeled 3-γ-MGlu-fragment 1 suitable for sequence analysis. Edman sequencing of the peptides released by a tryptic digest of the reduced and carboxymethylated bovine [14C]3-γ-MGlu-fragment 1 indicated that Gla residues at positions 7, 8, and 33 had been converted to [14C]γ-methyleneglutamyl residues. In addition Lys97 was found to contain a 14C label. Similar analysis of the human [14C]3-γ-MGlu-fragment 1 indicated that Gla residues at positions 7 and 32 were major modification sites and that Gla residues at positions 6 and 14 were partially modified. Lysine 96 was also modified in the human protein. The incorporation of a 14C label at Lys97 in bovine 3-γ-MGlu-fragment 1 protein is not responsible for the loss of Ca2+-promoted binding to PS/PC vesicles. We suggest that Gla residues 7, 8, and 33 are elements of the first Ca2+-binding site; occupancy of this site establishes the Ca2+-specific conformation which is essential for the Ca2+-promoted interaction of the bovine protein with PS/PC vesicles. These studies also suggest that the loss of Gla residues at positions 7 and 32 prevents the formation of the initial Ca2+-binding site in the human protein.