Human flap endonuclease-1 (hFEN-1) is highly homologous to human XPG, Saccharomyces cerevisiae RAD2 and S.cerevisiae RTH1 and shares structural and functional similarity with viral exonucleases such as T4 RNase H, T5 exonuclease and prokaryotic DNA polymerase 5'nucleases. Sequence alignment of 18 structure-specific nucleases revealed two conserved nuclease domains with seven conserved carboxyl residues and one positively charged residue. In a previous report, we showed that removal of the side chain of each individual acidic residue results in complete loss of flap endonuclease activity. Here we report a detailed analysis of substrate cleavage and binding of these mutant enzymes as well as of an additional site-directed mutation of a conserved acidic residue (E160). We found that the active mutant (R103A) has substrate binding and cleavage activity indistinguishable from the wild type enzyme. Of the inactive mutants, one (D181A) has substrate binding properties comparable to the wild type, while three others (D34A, D86A and E160A) bind with lower apparent affinity (2-, 9- and 18-fold reduced, respectively). The other mutants (D158A, D179A and D233A) have no detectable binding activity. We interpret the structural implications of these findings using the crystal structures of related enzymes with the flap endonuclease activity and propose that there are two metal ions (Mg2+or Mn2+) in hFEN enzyme. These two metal coordinated active sites are distinguishable but interrelated. One metal site is directly involved in nucleophile attack to the substrate phosphodiester bonds while the other may stabilize the structure for the DNA substrate binding. These two sites may be relatively close since some of carboxyl residues can serve as ligands for both sites.