The flavoenzyme UDP-galactopyranose mutase (UGM) is a mediator of cell wall biosynthesis in many pathogenic microorganisms. UGM catalyzes a unique ring contraction reaction that results in the conversion of UDP-galactopyranose (UDP-Galp) to UDP-galactofuranose (UDP-Galf). UDP-Galf is an essential precursor to the galactofuranose residues found in many different cell wall glycoconjugates. Due to the important consequences of UGM catalysis, structural and biochemical studies are needed to elucidate the mechanism and identify the key residues involved. Here, we report the results of site-directed mutagenesis studies on the absolutely conserved residues in the putative active site cleft. By generating variants of the UGM from Klebsiella pneumoniae, we have identified two arginine residues that play critical catalytic roles (alanine substitution abolishes detectable activity). These residues also have a profound effect on the binding of a fluorescent UDP derivative that inhibits UGM, suggesting that the Arg variants are defective in their ability to bind substrate. One of the residues, Arg280, is located in the putative active site, but, surprisingly, the structural studies conducted to date suggest that Arg174 is not. Molecular dynamics simulations indicate that closed UGM conformations can be accessed in which this residue contacts the pyrophosphoryl group of the UDP-Gal substrates. These results provide strong evidence that the mobile loop, noted in all the reported crystal structures, must move in order for UGM to bind its UDP-galactose substrate.