A functional element of an enzyme can be defined as the smallest unit of the local peptide backbone of which the connectivity is crucial for the catalytic activity. In order to elucidate the distribution of functional elements in an active site flexible loop (the M20 loop) of Escherichia coli dihydrofolate reductase, systematic cleavage of main chain connectivity was performed using circular permutation. Our analysis is based on the assumption that a permutation within a functional element would significantly reduce enzyme function, whereas ones outside or at the boundaries of the elements would affect the function only slightly. Thus, a functional element would be assigned as the minimum peptide chain between the identified boundaries. Comparison of the activities of the circularly permuted variants revealed that the peptide chain around the M20 loop could be divided into four regions (regions 1-4). Region 1 was found to play an important role in overall tertiary fold because most variants permuted at region 1 did not accumulate in E. coli cells stably. A distinction between region 2 and region 3 was in agreement with the extent of movements calculated from the coordinates of ⣠carbons, supporting the idea that the movement of peptide backbone is a key feature of enzyme function. The boundary between region 3 and region 4 coincided with that between the M20 loop and the following ⣠helix. From equilibrium binding studies, region 2 was found to be involved in the binding of nicotinamide substrates, whereas region 4 appeared to be very important for the binding of pterin substrates.The active site of an enzyme contains amino acid residues involved in enzyme function. Some residues in the active site bind to the substrate or cofactor, and others are involved in the catalysis itself. In addition, residues away from the active site sometimes promote the catalytic reaction through intramolecular interactions (1, 2). Enzyme-catalyzed reactions proceed, in general, through multiple steps, including binding of the substrate, catalysis, and release of product. At each step, certain amino acid residues play critical roles. However, an isolated collection of these directly functioning residues is not sufficient to obtain catalytic activity. Amino acid residues should be connected covalently to make up a polypeptide chain with a specific amino acid sequence that determines a proper tertiary structure. The functioning residues on the peptide backbone are then arranged to give the proper configuration for effective catalytic activity. Because enzymes cleaved at certain sites have been demonstrated to show catalytic activity as high as that of uncleaved enzyme (3-16), chain connectivity must not be absolutely required for catalytic activity. This means that chain connectivity is crucial for catalytic activity in some regions, but in others, it is not. The detailed configuration of the functioning residues seems to depend on local peptide backbone rather than the overall polypeptide chain. In this paper, we define a "functional...