Pterin-4a-carbinolamine dehydratase/dimerization cofactor for hepatocyte nuclear factor-1 alpha is a protein with two different functions. We have overexpressed and purified the human wild-type protein, and its Cys81Ser and Cys81Arg mutants. The Cys81Arg mutant has been proposed to be causative in a hyperphenylalaninaemic patient [Citron, B. A., Kaufman, S., Milstien, S., Naylor, E. W., Greene, C. L. & Davis, M. D. (1993) Am. J. Hum. Genet. 53, 768-774]. The dehydratase behaves as a tetramer on gel filtration, while cross-linking experiments showed mono-, di-, tri-, and tetrameric forms, irrespective of the presence of the single Cys81. Sulfhydryl-modifying reagents did not affect the activity, but rather showed that Cys81 is exposed. Various pterins bind and quench the tryptophan fluorescence suggesting the presence of a specific binding site. The fluorescence is destroyed upon light irradiation. Wild-type and the Cys81Ser protein enhance the rate of the phenylalanine hydroxylase assay approximately 10-fold, a value similar to that of native dehydratase from rat liver; the Cys81Arg mutant, in contrast, has significantly lower activity. This is compatible with the hypothesis that the dehydratase is a rate-limiting factor for the in vivo phenylalanine hydroxylase reaction. The three proteins enhance the spontaneous dehydration of the synthetic substrate 6,6-dimethyl-7,8-dihydropterin-4a-carbinolamine approximately 50-70-fold at 4 degrees C and pH 8.5. The results are discussed in view of the recently solved three-dimensional structure of the enzyme [Ficner, R., Sauer, U. W., Stier, G. & Suck, D. (1995) EMBO J. 14, 2032-2042].