alpha-Fetoprotein (AFP) binds a series of endogenous fatty acids. To identify the fatty acid binding site, this protein, purified from umbilical cord blood by immunoaffinity chromatography, was covalently labeled using 12-(9-anthroyloxy) stearic acid conjugated with Woodward's reagent K. After digestion with lysyl endopeptidase, the fatty acid-labeled peptide was isolated. Amino acid sequence analysis showed that this peptide consisted of the amino acid residue 210-227. The fact that no appreciable PTH-amino acid was detected at 14th cycle on the degradation suggested that Lys223 was modified with the fatty acid. The finding that lysyl endopeptidase did not cleave off at the Lys223 supported this suggestion. These results indicate that the carboxyl group of the bound fatty acid is located close to Lys223 in human AFP.