The role of the hydrophobic NH(2)-terminal domain of rat CYP2E1 for intracellular targeting and membrane binding was investigated in Saccharomyces cerevisiae as a model system. Several different CYP2E1 variants with deletions and mutations were expressed in yeast, and their intracellular localization and membrane-binding properties were analyzed. We found that an amino acid stretch including the B-helix from glycine 82 to asparagine 95 is responsible for mitochondrial association of CYP2E1 in yeast. Furthermore, we investigated the membrane-binding properties of the variants and concluded that the same region in the B-helix is responsible for membrane interactions of CYP2E1 by electrostatic interactions. A soluble variant of CYP2E1 lacking the first 82 amino acids and containing leucine to aspartate amino acid exchanges at positions 90 and 91, which disrupted the amphipathic nature of the B-helix, was expressed at relatively high levels in the yeast and was found to be catalytically active toward chlorzoxazone in cumene hydroperoxide-supported reactions. We suggest that these amino acid changes at positions 90 and 91 abolish the electrostatic interaction between the negatively charged membrane and the positively charged B-helix, thereby producing a soluble product.