The amino acid sequence of mouse dihydrofolate reductase was permuted circularly at the level of the gene. By transposing the 3'-terminal half of the coding sequence to its 5' terminus, the naturally adjacent amino and carboxyl termini of the native protein were fused, and one of the flexible peptide loops at the protein surface was cleaved. The steady-state kinetic constants, the dissociation constants of folate analogues, and the degree of activation by both mercurials and salt as well as the resistance toward digestion by trypsin were almost indistinguishable from those of a recombinant wild-type protein. Judged by these criteria, the circularly permuted variant has the same active site and overall structure as the wild-type enzyme. The only significant difference was the lower stability toward guanidinium chloride and the lower solubility of the circularly permuted variant. This behavior may be due to moving a mononucleotide binding fold from the interior of the sequence to the carboxyl terminus. Thus, dihydrofolate reductase requires neither the natural termini nor the cleaved loop for stability, for the conformational changes that accompany catalysis as well as the binding of inhibitors, and for the folding process.