The S'1 binding pocket of carboxypeptidase Y is hydrophobic, spacious, and open to solvent, and the enzyme exhibits a preference for hydrophobic P'1 amino acid residues. Leu272 and Ser297, situated at the rim of the pocket, and Leu267, slightly further away, have been substituted by site-directed mutagenesis. The mutant enzymes have been characterized kinetically with respect to their P'1 substrate preferences using the substrate series FA-Ala-Xaa-OH (Xaa = Leu, Glu, Lys, or Arg) and FA-Phe-Xaa-OH (Xaa = Ala, Val, or Leu). The results reveal that hydrophobic P'1 residues bind in the vicinity of residue 272 while positively charged P'1 residues interact with Ser297. Introduction of Asp or Glu at position 267 greatly reduced the activity toward hydrophobic P'1 residues (Leu) and increased the activity two- to three-fold for the hydrolysis of substrates with Lys or Arg in P'1. Negatively charged substituents at position 272 reduced the activity toward hydrophobic P'1 residues even more, but without increasing the activity toward positively charged P'1 residues. The mutant enzyme L267D + L272D was found to have a preference for substrates with C-terminal basic amino acid residues. The opposite situation, where the positively charged Lys or Arg were introduced at one of the positions 267, 272, or 297, did not increase the rather low activity toward substrates with Glu in the P'1 position but greatly reduced the activity toward substrates with C-terminal Lys or Arg due to electrostatic repulsion. The characterized mutant enzymes exhibit various specificities, which may be useful in C-terminal amino acid sequence determinations.