Substitutions for Tyr-503 of beta-galactosidase caused large decreases of the activity. Both the galactosylation (k2) and degalactosylation (k3) rates were decreased. Substitutions by residues without transferable protons, caused k3 to decrease much more than k2 while substitutions with residues having transferable protons, caused approximately equal decreases of k2 and k3. Several lines of evidence showed this. The Km values of the substituted enzymes were much smaller than those for the wild type if the substituted amino acid residues did not have transferable protons; this was not the case when the substituted residues had transferable protons. Inhibition studies showed that the Km values were not small because of small Ks values but were small because of relatively small k3 values (compared with the k2 values). The conclusion that the k3 values are small relative to k2 upon substitution with residues without transferable protons is also based upon other studies: studies indicating that the reaction rates were similar with different substrates, studies in the presence of alcohol acceptors, studies showing that the rate of inactivation by 2,4-dinitrophenyl-2-deoxy-2-F-beta-D-galactopyranoside decreased much less than the rate of reactivation; studies on burst kinetics, and pH studies. The data suggest that Tyr-503 may be important for the degalactosylation reaction because of its ability to transfer protons and thereby facilitate cleavage of the transient covalent bond between galactose and Glu-537.