The flavoprotein Escherichia coli methylenetetrahydrofolate reductase (MTHFR) catalyzes the reduction of 5,10-methylenetetrahydrofolate (CH(2)-H(4)folate) to 5-methyltetrahydrofolate (CH(3)-H(4)folate). The X-ray crystal structure of the enzyme has revealed the amino acids at the flavin active site that are likely to be relevant to catalysis. Here, we have focused on two conserved residues, Asp 120 and Glu 28. The presence of an acidic residue (Asp 120) near the N1-C2=O position of the flavin distinguishes MTHFR from all other known flavin oxidoreductases and suggests an important function for this residue in modulating the flavin reactivity. Modeling of the CH(3)-H(4)folate product into the enzyme active site also suggests roles for Asp 120 in binding of folate and in electrostatic stabilization of the putative 5-iminium cation intermediate during catalysis. In the NADH-menadione oxidoreductase assay and in the isolated reductive half-reaction, the Asp120Asn mutant enzyme is reduced by NADH 30% more rapidly than the wild-type enzyme, which is consistent with a measured increase in the flavin midpoint potential. Compared to the wild-type enzyme, the mutant showed 150-fold decreased activity in the physiological NADH-CH(2)-H(4)folate oxidoreductase reaction and in the oxidative half-reaction involving CH(2)-H(4)folate, but the apparent K(d) for CH(2)-H(4)folate was relatively unchanged. Our results support a role for Asp 120 in catalysis of folate reduction and perhaps in stabilization of the 5-iminium cation. By analogy to thymidylate synthase, which also uses CH(2)-H(4)folate as a substrate, Glu 28 may serve directly or via water as a general acid catalyst to aid in 5-iminium cation formation. Consistent with this role, the Glu28Gln mutant was unable to catalyze the reduction of CH(2)-H(4)folate and was inactive in the physiological oxidoreductase reaction. The mutant enzyme was able to bind CH(3)-H(4)folate, but reduction of the FAD cofactor was not observed. In the NADH-menadione oxidoreductase assay, the mutant demonstrated a 240-fold decrease in activity.