It has been suggested that the oxidase activity of NADH dehydrogenase of an alkaliphilic Bacillus YN-1 is markedly increased by the addition of free FAD. Site-directed mutagenesis of Lys-306, Lys-308, Arg-317, Arg-319 and Lys-332 of the enzyme was attempted to determine whether the basic amino acid residues are involved in FAD-dependent oxidase activity. Replacement of Arg-317, Arg-319 and Lys-332 by Ala had almost no effect on activity. Substitution of Lys-306 by Ala caused complete loss of the activity. When Lys-308 was replaced by Ala, the extent of FAD stimulation of the oxidase activity of the mutant (K308A) was only one-third that of the wild-type enzyme. FAD stimulation of oxidase activity of the wild-type enzyme was competitively inhibited by NAD. Although the K308A enzyme was also inhibited by NAD, this inhibition was significantly lower than that of the wild-type enzyme. It is likely that Lys-308 plays an important role in regulation of oxidase activity.