The enzyme 10-formyltetrahydrofolate dehydrogenase (FDH) catalyzes conversion of 10-formyltetrahydrofolate to tetrahydrofolate in either a dehydrogenase or hydrolase reaction. The hydrolase reaction occurs in a 310-residue amino-terminal domain of FDH (N(t)-FDH), whereas the dehydrogenase reaction requires the full-length enzyme. N(t)-FDH shares some sequence identity with several 10-formyltetrahydrofolate-utilizing enzymes. All these enzymes have a strictly conserved aspartate, which is Asp(142) in the case of N(t)-FDH. Replacement of the aspartate with alanine, asparagine, glutamate, or glutamine in N(t)-FDH resulted in complete loss of hydrolase activity. All the mutants, however, were able to bind folate, although with lower affinity than wild-type N(t)-FDH. Six other aspartate residues located near the conserved Asp(142) were substituted with an alanine, and these substitutions did not result in any significant changes in the hydrolase activity. The expressed D142A mutant of the full-length enzyme completely lost both hydrolase and dehydrogenase activities. This study shows that Asp(142) is an essential residue in the enzyme mechanism for both the hydrolase and dehydrogenase reactions of FDH, suggesting that either the two catalytic centers of FDH are overlapped or the dehydrogenase reaction occurs within the hydrolase catalytic center.