The roles of protein dimerization and double-stranded RNA (dsRNA) binding in the biochemical and cellular activities of PKR, the dsRNA-dependent protein kinase, were investigated. We have previously shown that both properties of the protein are mediated by the same domain. Here we show that dimerization is mediated by hydrophobic residues present on one side of an amphipathic alpha-helical structure within this domain. Appropriate substitution mutations of residues on that side produced mutants with increased or decreased dimerization activities. Using these mutants, we demonstrated that dimerization is not essential for dsRNA binding. However, enhancing dimerization artificially, by providing an extraneous dimerization domain, increased dsRNA binding of both wild-type and mutant proteins. In vitro, the dimerization-defective mutants could not be activated by dsRNA but were activated normally by heparin. In Saccharomyces cerevisiae, unlike wild-type PKR, these mutants could not inhibit cell growth and the dsRNA-binding domain of the dimerization-defective mutants could not prevent the antigrowth effect of wild-type PKR. These results demonstrate the biological importance of the dimerization properties of PKR.