To study membrane topology and mechanism for substrate specificity, we truncated residues 2-24 in microsomal cytochrome P450 7A1 (P450 7A1) and introduced conservative and nonconservative substitutions at positions 214 -227. Heterologous expression in Escherichia coli was followed by investigation of the subcellular distribution of the mutant P450s and determination of the kinetic and substrate binding parameters for cholesterol. The results indicate that a hydrophobic region, comprising residues 214 -227, forms a secondary site of attachment to the membrane in P450 7A1 in addition to the NH 2 -terminal signal-anchor sequence. There are two groups of residues at this enzyme-membrane interface. The first are those whose mutation results in more cytosolic P450 (Val-214, His-225, and Met-226). The second group are those whose mutation leads to more membrane-bound P450 (Phe-215, Leu-218, Ile-224, and Phe-227). In addition, the V214A, V214L, V214T, F215A, F215L, F215Y, L218I, L218V, V219T, and M226A mutants showed a 5-12-fold increased K m for cholesterol. The k cat of the V214A, V214L, V219T, and M226A mutants was increased up to 1.8-fold, and that of the V214T, F215A, F215L, F215Y, L218I, and L218V mutants was decreased 3-10.5-fold. Based on analysis of these mutations we suggest that cholesterol enters P450 7A1 through the membrane, and Val-214, Phe-215, and Leu-218 are the residues located near the point of cholesterol entry. The results provide an understanding of both the P450 7A1-membrane interactions and the mechanism for substrate specificity.The conversion of cholesterol into 7␣-hydroxycholesterol represents the first and rate-limiting step in overall bile acid biosynthesis, the major pathway for cholesterol elimination in mammals. This reaction takes place in the liver and is catalyzed by the microsomal enzyme cytochrome P450 7A1 (P450 7A1) (1, 2). Human P450 7A1 has been cloned (3) and expressed in Escherichia coli as a truncated (⌬2-24) protein (4); however, little is known about the molecular basis for substrate specificity in this important P450.Based on available crystal structures of eight different P450s that belong to distinct gene families (5-12), a paradigm is beginning to emerge: the mechanism for substrate specificity in the P450 superfamily is complex and determined not solely by residues located inside the enzyme active site (13-15). Unlike many enzymes, the substrate binding pocket of structurally characterized P450s does not form an open cleft at the molecular surface, but rather is buried inside the molecule. A channel connecting the protein exterior and the substrate binding site (substrate access channel) is seen in the structure of only two P450s, 102 and 51 (6, 12), and it is postulated that substrate entry in P450s is controlled by the opening motion of the substrate access channel (16). Although it is not clear how hydrophobic substrates reach the active site of soluble P450s, it has been proposed that in membrane-bound P450s the entrance of the substrate access channel is located wi...