The carboxyl-terminal region of plant ferredoxin-NADP+ reductases is formed by an invariant alpha-helix/loop/beta-strand, culminating in a conserved tyrosine that displays extensive interaction with the prosthetic group FAD. We have investigated the potential role of the terminal region in reductase function, by introducing mutations and deletions on pea ferredoxin-NADP+ reductase overexpressed in Escherichia coli. Replacement of the terminal tyrosine by tryptophan, phenylalanine, serine, and glycine resulted in a 2.2-, 2.0-, 22-, and 302-fold reduction, respectively, in kcat for the diaphorase reaction, whereas elimination of the tyrosine caused a 846-fold decrease in kcat. Km values were largely unaffected by the substitutions. Similar results were obtained when the mutants were assayed for cytochrome c reduction, indicating that aromaticity is the most important factor to the function of the tyrosine in catalysis. The presence of the phenol ring at the carboxyl-terminal position of wild-type reductase is important, but not an absolute requirement for enzyme function or FAD assembly. Deletion of the alpha-helix/beta-strand region prevented reductase proper folding in the bacterial host, while shortening of the terminal region by splicing 3 amino acids at the beginning of the alpha-helix produced a moderately soluble reductase, devoid of FAD and enzymatic activity.