Ile58 of hen egg-white lysozyme (HEL) is buried in the interior of the molecule and is considered to participate in sugar residue binding at subsite C through hydrophobic interaction. The contribution of Ile58 to lysozyme function and stability was investigated by replacement of Ile58 with less hydrophobic residues, Val (I58V) and Ala (I58A). Replacement of Ile58 with Ala decreased substrate binding ability to an N-acetylglucosamine trisaccharide, (GlcNAc)3, and a GlcNAc polymer, chitin, whereas replacement with Val had little effect. Similar results were obtained as to enzymatic activity toward both the bacterial cell substrate and glycol chitin. Kinetic analysis by substrate (GlcNAc)5 revealed that replacement of the Ile residue reduced the sugar residue affinity at subsite C and the rate constant of glycosidic bond cleavage. The rate constant of glycosidic cleavage for mutant I58A was about one-third of that for the wild-type. Guanidine hydrochloride unfolding experiments showed that mutants I58V and I58A were less stable than the wild-type, by 1.88 and 2.88 kcal/mol respectively. Moreover, the stability of the protein inserted at this position decreased linearly with decreasing hydrophobicity of the inserted residue. It appears that the hydrophobicity of Ile58 is an important factor in the efficient substrate binding, enzymatic reaction, and structural stability of HEL.