As part of a systematic study of the effect of single amino acid substitutions on the structure, function and stability of the lysozyme from bacteriophage T4, we have characterized a mutant lysozyme for which the catalytic activity is reduced to 4% that of the wild-type enzyme, yet the location of the amino acid substitution is on the far side of the molecule, 25 A from the active site. Genetic and chemical analysis show that the mutant lysozyme differs from wild-type only in the replacement of Glu128 by a lysine residue. Crystallographic analysis confirms the location of the amino acid substitution, and also shows that the replacement of Glu128, which is on the surface of the protein, causes very little change in the three-dimensional structure of the lysozyme molecule. Thermodynamic analysis shows that the stability of the mutant lysozyme is comparable with that of native lysozyme. These results suggest that Glu128 participates directly in substrate binding and/or catalysis, and argue against the possibility that the low activity of the mutant enzyme is due to an indirect effect such as destabilization of the lysozyme molecule, or modification of its three-dimensional structure. Glu128 is located in the part of the carboxy-terminal domain of phage lysozyme that has no counterpart in the structure of hen egg-white lysozyme. We suggest that the role of this C-terminal domain is to bind the peptide cross-link that connects neighboring saccharide strands within the cell walls of Escherichia coli . This postulate is consistent with the known differences in specificity between phage lysozyme and hen egg-white lysozyme, and is also compatible with the activity of native and mutant phage lysozymes toward different bacterial cell walls.