NAD+-dependent formate dehydrogenase (FDH) from Candida boidinii was cloned and expressed to a high level in Escherichia coli (20% of soluble E. coli protein). Molecular modelling studies were used to create a three-dimensional model of C. boidinii FDH, based on a known structure of the Pseudomonas sp. 101 enzyme. This model was used for investigating the catalytic mechanism by site-directed mutagenesis. Eleven forms of C. boidinii FDH were characterized by steady-state kinetic analysis: the wild type as well as 10 mutants involving single (Phe-69–Ala, Asn-119–His, Ile-175–Ala, Gln-197–Leu, Arg-258–Ala, Gln-287–Glu and His-311–Gln) and double amino acid substitutions (Asn-119–His/His-311–Gln, Gln-287–Glu/His-311–Gln and Gln-287–Glu/Pro-288–Thr). The kinetic results of the mutant enzymes provide the first experimental support that hydrophobic patches, formed by Phe-69 and Ile-175, destabilize substrates and stabilize products. Also, the key role of Arg-258 in stabilization of the negative charge on the migrating hydride was established. Asn-119, besides being an anchor group for formate, also may comprise one of the hinge regions around which the two domains shift on binding of NAD+. The more unexpected results, obtained for the His-311–Gln and Gln-287–Glu/His-311–Gln mutants, combined with molecular modelling, suggest that steric as well as electrostatic properties of His-311 are important for enzyme function. An important structural role has also been attributed to cis-Pro-288. This residue may provide the key residues Gln-287 and His-311 with the proper orientation for productive binding of formate. The FDH nucleotide sequence has been submitted to the EMBL Nucleotide Sequence Database under the accession no. AJ011046.