Structure and function were studied for Crocodylus porosus transthyretin (crocTTR), an important intermediate in TTR evolution. The cDNA for crocTTR mRNA was cloned and sequenced and the amino acid sequence of crocTTR was deduced. In contrast to mammalian TTRs, but similar to avian and lizard TTRs, the subunit of crocTTR had a long and hydrophobic NH(2)-terminal region. Different from the situation in mammals, triiodothyronine (T(3)) was bound by crocTTR with higher affinity than thyroxine (T(4)). Recombinant crocTTR and a chimeric construct, with the NH(2)-terminal region of crocTTR being replaced by that of Xenopus laevis TTR, were synthesized in the yeast Pichia pastoris. Analysis of the affinity of the chimeric TTRs showed that the NH(2)-terminal region modulates T(4) and T(3) binding characteristics of TTR. The structural differences of the NH(2)-terminal regions of reptilian and amphibian TTRs were caused by a shift in splice sites at the 5' end of exon 2. The comparison of crocodile and other vertebrate TTRs shows that TTR evolution is an example for positive Darwinian evolution and identifies its molecular mechanism.