PEP mutase catalyzes the conversion of phosphoenolpyruvate (PEP) to phosphonopyruvate in biosynthetic pathways leading to phosphonate secondary metabolites. A recent X-ray structure [Huang, K., Li, Z., Jia, Y., Dunaway-Mariano, D., and Herzberg, O. (1999) Structure (in press)] of the Mytilus edulis enzyme complexed with the Mg(II) cofactor and oxalate inhibitor reveals an alpha/beta-barrel backbone-fold housing an active site in which Mg(II) is bound by the two carboxylate groups of the oxalate ligand and the side chain of D85 and, via bridging water molecules, by the side chains of D58, D85, D87, and E114. The oxalate ligand, in turn, interacts with the side chains of R159, W44, and S46 and the backbone amide NHs of G47 and L48. Modeling studies identified two feasible PEP binding modes: model A in which PEP replaces oxalate with its carboxylate group interacting with R159 and its phosphoryl group positioned close to D58 and Mg(II) shifting slightly from its original position in the crystal structure, and model B in which PEP replaces oxalate with its phosphoryl group interacting with R159 and Mg(II) retaining its original position. Site-directed mutagenesis studies of the key mutase active site residues (R159, D58, D85, D87, and E114) were carried out in order to evaluate the catalytic roles predicted by the two models. The observed retention of low catalytic activity in the mutants R159A, D85A, D87A, and E114A, coupled with the absence of detectable catalytic activity in D58A, was interpreted as evidence for model A in which D58 functions in nucleophilic catalysis (phosphoryl transfer), R159 functions in PEP carboxylate group binding, and the carboxylates of D85, D87 and E114 function in Mg(II) binding. These results also provide evidence against model B in which R159 serves to mediate the phosphoryl transfer. A catalytic motif, which could serve both the phosphoryl transfer and the C-C cleavage enzymes of the PEP mutase superfamily, is proposed.