It was shown that Cys-168 is required for RNase T function and thermostability and that its hydrophobic properties are important for this role (Li, Z., Zhan, L., and Deutscher, M. P. (1996) J. Biol Chem. 271, 1127-1132). To understand the molecular basis for these findings, further studies of Cys-168 and RNase T structure were carried out. Treatment of RNase T with the sulfhydryl-modifying agent 5,5'-dithiobis-(2-nitrobenzoic acid) leads not only to inactivation, but also to monomerization of the protein. Similarly, specifically converting Cys-168 to either serine or asparagine leads to loss of activity and to monomer formation at 37 degrees C. However, at 10 degrees C the serine mutant remains as a dimer and retains full RNase T activity, whereas the asparagine derivative shows only a low level of activity and of dimer formation. These data show a strong correlation between activity and the dimer form of RNase T. The importance of dimer formation was also shown in vivo using genetic studies. An inactive mutant of RNase T, termed HA2, which exists as a dimer at 37 degrees C in vitro, completely suppresses endogenous RNase T activity in vivo and in vitro when introduced into a RNase T+ cell on a multicopy phagemid, most likely as a consequence of inactive heterodimer formation. Introduction of the HA2 gene on a single-copy plasmid, as expected, leads to a proportionally smaller effect on endogenous activity. The dominant negative effect displayed by the HA2 protein can be relieved by an additional mutation in HA2 RNase T that abolishes its ability to dimerize. An inactive mutant asparagine derivative of Cys-168, which also does not dimerize, also shows little of the dominant negative phenotype. Thus, these data demonstrate that RNase T dimerizes in vivo, that the dimer form is required for RNase T activity, and that Cys-168 is needed for dimerization of the enzyme.