Rat hepatic squalene synthase (RSS, EC 2.5.1.21) contains three conserved sections, A, B, and C, that were proposed to be involved in catalysis (McKenzie, T. L., Jiang, G., Straubhaar, J. R., Conrad, D., and Shechter, I. (1992) J. Biol. Chem. 267, 21368-21374). Here we use the high expression vector pTrxRSS and site-directed mutagenesis to determine the specific residues in these sections that are essential for the two reactions catalyzed by RSS. Section C mutants F288Y, F288L, F286Y, F286W, F286L, Q293N, and Q283E accumulate presqualene diphosphate (PSPP) from trans-farnesyl diphosphate (FPP) with reduced production of squalene. F288L, which retains approximately 50% first step activity, displays only residual activity (0.2%) in the production of squalene from either FPP or PSPP. Substitution of either Phe288 or Phe286 with charged residues completely abolishes the enzyme activity. Thus, F288W, F288D, F288R, F286D, and F286R cannot produce squalene from either FPP or PSPP. All single residue mutants in Section A, except Tyr171, retain most of the RSS activity, with no detectable accumulation of PSPP in an assay mixture complete with NADPH. Y171F, Y171S, and Y171W are all inactive. Section B, which binds the diphosphate moieties of the allylic diphosphate subtrates, contains four negatively charged residues: Glu222, Glu226, Asp219, and Asp223. The two Glu residues can be replaced with neutral or with positively charged residues without signficantly affecting enzyme activity. However, replacement of either Asp residues with Asn eliminates all but a residual level of activity, and substitution with Glu abolishes all activity. These results indicate that 1) Section C, in particular Phe288, may be involved in the second step of catalysis, 2) Tyr171 of Section A is essential for catalysis, most likely for the first reaction, 3) the two Asp residues in Section B are essential for the activity and most likely bind the substrate via magnesium salt bridges. Based on these results, a mechanism for the first reaction is proposed.