The enzyme, 10-formyltetrahydrofolate dehydrogenase (FDH), converts 10-formyltetrahydrofolate (10-formyl-THF) to tetrahydrofolate in an NADP(+)-dependent dehydrogenase reaction or an NADP(+)-independent hydrolase reaction. The hydrolase reaction occurs in a 310-amino acid long amino-terminal domain of FDH (N(t)-FDH), whereas the dehydrogenase reaction requires the full-length enzyme. The amino-terminal domain of FDH shares some sequence identity with several other enzymes utilizing 10-formyl-THF as a substrate. These enzymes have two strictly conserved residues, aspartate and histidine, in the putative catalytic center. We have shown recently that the conserved aspartate is involved in FDH catalysis. In the present work we studied the role of the conserved histidine, His(106), in FDH function. Site-directed mutagenesis experiments showed that replacement of the histidine with alanine, asparagine, aspartate, glutamate, glutamine, or arginine in N(t)-FDH resulted in expression of insoluble proteins. Replacement of the histidine with another positively charged residue, lysine, produced a soluble mutant with no hydrolase activity. The insoluble mutants refolded from inclusion bodies adopted a conformation inherent to the wild-type N(t)-FDH, but they did not exhibit any hydrolase activity. Substitution of alanine for three non-conserved histidines located close to the conserved one did not reveal any significant changes in the hydrolase activity of N(t)-FDH. Expressed full-length FDH with the substitution of lysine for the His(106) completely lost both the hydrolase and dehydrogenase activities. Thus, our study showed that His(106), besides being an important structural residue, is also directly involved in both the hydrolase and dehydrogenase mechanisms of FDH. Modeling of the putative hydrolase catalytic center/folate-binding site suggested that the catalytic residues, aspartate and histidine, are unlikely to be adjacent to the catalytic cysteine in the aldehyde dehydrogenase catalytic center. We hypothesize that 10-formyl-THF dehydrogenase reaction is not an independent reaction but is a combination of hydrolase and aldehyde dehydrogenase reactions.