The crystal structure of the dimeric catalytic domain (residues 118-424) of human PheOH (hPheOH), cocrystallized with the oxidized form of the cofactor (7,8-dihydro-L-biopterin, BH(2)), has been determined at 2.0 A resolution. The pterin binds in the second coordination sphere of the catalytic iron (the C4a atom is 6.1 A away), and interacts through several hydrogen bonds to two water molecules coordinated to the iron, as well as to the main chain carbonyl oxygens of Ala322, Gly247, and Leu249 and the main chain amide of Leu249. Some important conformational changes are seen in the active site upon pterin binding. The loop between residues 245 and 250 moves in the direction of the iron, and thus allows for several important hydrogen bonds to the pterin ring to be formed. The pterin cofactor is in an ideal orientation for dioxygen to bind in a bridging position between the iron and the pterin. The pterin ring forms an aromatic pi-stacking interaction with Phe254, and Tyr325 contributes to the positioning of the pterin ring and its dihydroxypropyl side chain by hydrophobic interactions. Of particular interest in the hPheOH x BH(2) binary complex structure is the finding that Glu286 hydrogen bonds to one of the water molecules coordinated to the iron as well as to a water molecule which hydrogen bonds to N3 of the pterin ring. Site-specific mutations of Glu286 (E286A and E286Q), Phe254 (F254A and F254L), and Tyr325 (Y325F) have confirmed the important contribution of Glu286 and Phe254 to the normal positioning of the pterin cofactor and catalytic activity of hPheOH. Tyr325 also contributes to the correct positioning of the pterin, but has no direct function in the catalytic reaction, in agreement with the results obtained with rat TyrOH [Daubner, S. C., and Fitzpatrick, P. F. (1998) Biochemistry 37, 16440-16444]. Superposition of the binary hPheOH.BH(2) complex onto the crystal structure of the ligand-free rat PheOH (which contains the regulatory and catalytic domains) [Kobe, B., Jennings, I. G., House, C. M., Michell, B. J., Goodwill, K. E., Santarsiero, B. D., Stevens, R. C., Cotton, R. G. H., and Kemp, B. E. (1999) Nat. Struct. Biol. 6, 442-448] reveals that the C2'-hydroxyl group of BH(2) is sufficiently close to form hydrogen bonds to Ser23 in the regulatory domain. Similar interactions are seen with the hPheOH.adrenaline complex and Ser23. These interactions suggest a structural explanation for the specific regulatory properties of the dihydroxypropyl side chain of BH(4) (negative effector) in the full-length enzyme in terms of phosphorylation of Ser16 and activation by L-Phe.