Insulin-degrading enzyme is a nonlysosomal metalloprotease that initiates degradation of internalized insulin in some cells. We previously identified a potential catalytic site containing an inversion of the Zn(2+)-binding domain of the thermolysin family (Kuo, W.-L., Gehm, B. D., and Rosner, M. R. (1991) Mol. Endocrinol. 4, 1580-1591). The role of this site in catalysis was examined by mutating one of the presumptive Zn(2+)-coordinating histidines (His108) in human insulin-degrading enzyme to leucine or glutamine, which were predicted to reduce or eliminate Zn2+ binding without substantially altering secondary structure. cDNAs for the mutant and wild-type enzymes were incorporated into an expression vector and transfected into COS cells. Expression of the transfected genes was confirmed by Northern and Western blots. In contrast to the wild-type gene, which increased insulin degradation by cell extracts and intact cells several-fold, the mutated genes had no effect on insulin degradation, indicating a loss of catalytic activity. However, the mutants' ability to bind substrate was unimpaired, as affinity labeling with 125I-insulin was increased compared to the wild type. These results suggest that an intact Zn(2+)-binding domain in human insulin-degrading enzyme is required for catalytic activity and can affect, but is not required for, substrate binding.