The roles of 11 conserved amino acids of the beta-subunit of human farnesyl:protein transferase (FTase) were examined by performing kinetic and biochemical analyses of site-directed mutants. This biochemical information along with the x-ray crystal structure of rat FTase indicates that residues His-248, Arg-291, Lys-294, and Trp-303 are involved with binding and utilization of the substrate farnesyl diphosphate. Our data confirm structural evidence that amino acids Cys-299, Asp-297, and His-362 are ligands for the essential Zn2+ ion and suggest that Asp-359 may also play a role in Zn2+ binding. Additionally, we demonstrate that Arg-202 is important for binding the essential C-terminal carboxylate of the protein substrate.