Saccharomyces cerevisiae expresses a 67.8 kDa homodimeric serine thioesterase, S-formylglutathione hydrolase (SFGH), that is 39.9% identical with human esterase D. Both enzymes possess significant carboxylesterase and S-formylglutathione thioesterase activity but are unusually resistant to organophosphate (OP) inhibitors. We determined the X-ray crystal structure of yeast (y) SFGH to 2.3 A resolution by multiwavelength anomalous dispersion and used the structure to guide site-specific mutagenesis experiments addressing substrate and inhibitor reactivity. Our results demonstrate a steric mechanism of OP resistance mediated by a single indole ring (W197) located in an enzyme "acyl pocket". The W197I substitution enhances ySFGH reactivity with paraoxon by >1000-fold ( k i (W197I) = 16 +/- 2 mM (-1) h (-1)), thereby overcoming natural OP resistance. W197I increases the rate of OP inhibition under pseudo-first-order conditions but does not accelerate OP hydrolysis. The structure of the paraoxon-inhibited W197I variant was determined by molecular replacement (2.2 A); it revealed a stabilized sulfenic acid at Cys60. Wild-type (WT) ySFGH is inhibited by thiol reactive compounds and is sensitive to oxidation; thus, the cysteine sulfenic acid may play a role in the regulation of a "D-type" esterase. The structure of the W197I variant is the first reported cysteine sulfenic acid in a serine esterase. We constructed five Cys60/W197I variants and show that introducing a positive charge near the oxyanion hole, W197I/C60R or W197I/C60K, results in a further enhancement of the rates of phosphorylation with paraoxon ( k i = 42 or 80 mM (-1) h (-1), respectively) but does not affect the dephosphorylation of the enzyme. We also characterized three histidine substitutions near the oxyanion hole, G57H, L58H, and M162H, which significantly decrease esterase activity.