Serine hydroxymethyltransferase (SHMT), a pyridoxal-5'-phosphate (PLP)-dependent enzyme catalyzes the tetrahydrofolate (H(4)-folate)-dependent retro-aldol cleavage of serine to form 5,10-methylene H(4)-folate and glycine. The structure-function relationship of SHMT was studied in our laboratory initially by mutation of residues that are conserved in all SHMTs and later by structure-based mutagenesis of residues located in the active site. The analysis of mutants showed that K71, Y72, R80, D89, W110, S202, C203, H304, H306 and H356 residues are involved in maintenance of the oligomeric structure. The mutation of D227, a residue involved in charge relay system, led to the formation of inactive dimers, indicating that this residue has a role in maintaining the tetrameric structure and catalysis. E74, a residue appropriately positioned in the structure of the enzyme to carry out proton abstraction, was shown by characterization of E74Q and E74K mutants to be involved in conversion of the enzyme from an 'open' to 'closed' conformation rather than proton abstraction from the hydroxyl group of serine. K256, the residue involved in the formation of Schiffs base with PLP, also plays a crucial role in the maintenance of the tetrameric structure. Mutation of R262 residue established the importance of distal interactions in facilitating catalysis and Y82 is not involved in the formaldehyde transfer via the postulated hemiacetal intermediate but plays a role in stabilizing the quinonoid intermediate. The mutational analysis of scSHMT along with the structure of recombinant Bacillus stearothermophilus SHMT and its substrate(s) complexes was used to provide evidence for a direct transfer mechanism rather than retro-aldol cleavage for the reaction catalyzed by SHMT.