6-Hydroxymethyl-7,8-dihydropterin pyrophosphokinase (HPPK) catalyzes the transfer of pyrophosphoryl group from ATP to 6-hydroxymethyl-7,8-dihydropterin (HP) following an ordered bi-bi mechanism with ATP as the first substrate. The rate-limiting step of the reaction is product release, and the complete active center is assembled and sealed only upon the binding of both ATP and HP. The assembly of the active center involves large conformational changes in three catalytic loops, among which loop 3 undergoes the most dramatic and unusual changes. To investigate the roles of loop 3 in catalysis, we have made a deletion mutant, which has been investigated by biochemical and X-ray crystallographic analysis. The biochemical data showed that the deletion mutation does not have significant effects on the dissociation constants or the rate constants for the binding of the first substrate MgATP or its analogues. The dissociation constant of HP for the mutant increases by a factor of approximately 100, which is due to a large increase in the dissociation rate constant. The deletion mutation causes a shift of the rate-limiting step in the reaction and a decrease in the rate constant for the chemical step by a factor of approximately 1.1 x 10(5). The crystal structures revealed that the deletion mutation does not affect protein folding, but the catalytic center of the mutant is not fully assembled even upon the formation of the ternary complex and is not properly sealed. The results together suggest that loop 3 is dispensable for the folding of the protein and the binding of the first substrate MgATP, but is required for the assembling and sealing of the active center. The loop plays an important role in the stabilization of the ternary complex and is critical for catalysis.