The translation product of the VMA1 gene of Saccharomyces cerevisiae undergoes protein splicing, in which the intervening region is autocatalytically excised and the franking regions are ligated. The splicing reaction is catalyzed essentially by the in-frame insert, VMA1-derived endonuclease (VDE), which is a site-specific endonuclease to mediate gene homing. Previous mutational analysis of the splicing reaction has been concentrated extensively upon the splice junctions. However, it still remains unknown which amino acid residues are crucial for the splicing reaction within the entire region of VDE and its neighboring elements. In this work, a polymerase chain reaction-based random mutagenesis strategy was used to identify such residues throughout the overall intervening sequence of the VMA1 gene. Splicing-defective mutant proteins were initially screened using a bacterial expression system and then analyzed further in yeast cells. Mutations were mapped at the N-and C-terminal splice junctions and around the N-terminal one-third of VDE. We identified four potent mutants that yielded aberrant products with molecular masses of 200, 90, and 80 kDa. We suggest that the conserved His 362 , newly identified as the essential residue for the splicing reaction, contributes to the first cleavage at the N-terminal junction, whereas His 736 assists the second cleavage by Asn cyclization at the C-terminal junction. Mutations in these regions did not appear to destroy the endonuclease activity of VDE.Protein splicing is a posttranslational process, in which an intervening protein sequence is autocatalytically removed from a precursor protein and the two flanking sequences are ligated (1). In the budding yeast Saccharomyces cerevisiae, the nascent 120-kDa VMA1 translational product (Vma1 protozyme (1)) catalyzes protein splicing to yield a 70-kDa catalytic subunit of the vacuolar H ϩ -ATPase and a 50-kDa site-specific endonuclease (VMA1-derived endonuclease; VDE) 1 (2, 3). Since the discovery of protein splicing in S. cerevisiae (2, 3), this compelling reaction has been found in a number of protozymes in eucarya (2-4), bacteria (5-8), and archaea (9, 10).The VDE region in the Vma1 protozyme plays a central role for the protein splicing reaction (11,12). We have also shown that VDE bracketed by only 6 proximal and 4 distal amino acids is autocatalytically processed in vitro (13). These results support the idea that the VDE sequence and a few external amino acids 2 contain sufficient information for protein splicing.Only short amino acid sequence motifs are conserved among protein splicing elements (7). Thiol-or hydroxyl-containing Cys, Ser, or Thr is found at both splice junctions. A few hydrophobic amino acids are present in front of an invariant His-Asn dipeptide at the C-terminal splice junction. These residues around the splice sites have been found to play key roles in the protein splicing reaction, based mostly on site-directed mutagenesis studies (5,10,11,12).To understand a mechanism and structural integrity for protei...