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Most Helicobacter pylori strains secrete a toxin (VacA) that causes structural and functional alterations in epithelial cells and is thought to play an important role in the pathogenesis of H. pylori-associated gastroduodenal diseases. The amino acid sequence, ultrastructural morphology, and cellular effects of VacA are unrelated to those of any other known bacterial protein toxin, and the VacA mechanism of action remains poorly understood. To analyze the functional role of a unique strongly hydrophobic region near the VacA amino terminus, we constructed an H. pylori strain that produced a mutant VacA protein (VacA-(Delta6-27)) in which this hydrophobic segment was deleted. VacA-(Delta6-27) was secreted by H. pylori, oligomerized properly, and formed two-dimensional lipid-bound crystals with structural features that were indistinguishable from those of wild-type VacA. However, VacA-(Delta6-27) formed ion-conductive channels in planar lipid bilayers significantly more slowly than did wild-type VacA, and the mutant channels were less anion-selective. Mixtures of wild-type VacA and VacA-(Delta6-27) formed membrane channels with properties intermediate between those formed by either isolated species. VacA-(Delta6-27) did not exhibit any detectable defects in binding or uptake by HeLa cells, but this mutant toxin failed to induce cell vacuolation. Moreover, when an equimolar mixture of purified VacA-(Delta6-27) and purified wild-type VacA were added simultaneously to HeLa cells, the mutant toxin exhibited a dominant negative effect, completely inhibiting the vacuolating activity of wild-type VacA. A dominant negative effect also was observed when HeLa cells were co-transfected with plasmids encoding wild-type and mutant toxins. We propose a model in which the dominant negative effects of VacA-(Delta6-27) result from protein-protein interactions between the mutant and wild-type VacA proteins, thereby resulting in the formation of mixed oligomers with defective functional activity.