The protein mediator MIF has been identified as being released from immune cells by glucocorticoid stimulation and to counter-regulate glucocorticoid action. MIF also has been described recently to exhibit dopachrome tautomerase activity and to be structurally homologous to the bacterial enzymes 4-oxalocrotonate tautomerase (4-OT) and 5-carboxymethyl-2-hydroxymuconate isomerase (CHMI). We performed site-directed mutagenesis and biochemical analyses of mouse MIF in order to identify amino acid residues and protein domains that are essential for enzymatic reactivity. Mutant proteins which lacked a free N-terminal proline residue were enzymatically inactive, as was a preparation of native MIF modified covalently at its N terminus by 3-bromopyruvate, suggesting that this proline has a catalytic function. Substitutions of the internal histidine residues 42 and 63 did not affect enzymatic activity, indicating that these basic residues are not involved in dopachrome tautomerization. Carboxy-truncated forms of MIF (residues 1-110 and 1-104) also were inactive, affirming the role of the carboxy terminus in stable trimer formation and the importance of the trimer for enzymatic activity. Additional evidence for the homotrimeric structure of MIF under native solution conditions was obtained by SDS-PAGE analysis of MIF after chemical cross-linking at low protein concentrations. The enzymatic activity of MIF was found to be reversibly inhibited by micromolar concentrations of fatty acids with chain lengths of at least 16 carbon atoms. Of note, molecular modeling of the substrate L-dopachrome methyl ester into the active site of MIF suggests an acid-catalyzed enzymatic mechanism that is different from that deduced from studies of the enzymes 4-OT and CHMI. Finally, in vitro analysis of an enzymatically inactive MIF species (P2 --> S) indicates that the glucocorticoid counter-regulatory activity of MIF can be functionally dissociated from its tautomerization activity.