The relationship between the enzymatic and the transcriptional activity of the bifunctional protein pterin-4a-carbinolamine dehydratase/dimerization cofactor for hepatocyte nuclear factor 1 (DCoH) has been elucidated by site-directed mutagenesis. DCoH dimers harbor a binding site for hepatocyte nuclear factor 1 (HNF1), two active centers that bind pterins, and a saddle-shaped surface that resembles nucleic acid binding domains. Two domains of the protein have been selectively targeted to determine if a change in one activity affects the other. No strong correlation has been found, supporting the idea that carbinolamine dehydratase activity is not required for HNF1 binding in vitro or transcriptional coactivation in vivo. Double mutations in the active center, however, influence the in vivo transcriptional activity but not HNF1 binding. This finding suggests that some active center residues also are used during transcription, possibly for binding of another (macro)molecule. Several mutations in the saddle led to a surprising increase in transcription, therefore linking this domain to transcriptional regulation as well. The transcriptional function of DCoH therefore is composed of two parts, HNF1 binding and another contributing effect that involves the active site and, indirectly, the saddle.