The zinc metalloenzyme protein farnesyltransferase (FTase) catalyzes the transfer of a 15-carbon farnesyl moiety from farnesyl diphosphate (FPP) to a cysteine residue near the C-terminus of a protein substrate. Several crystal structures of inactive FTase·FPP·peptide complexes indicate that K164α interacts with the α-phosphate and that H248β and Y300β form hydrogen bonds with the β-phosphate of FPP Strickland, C. L., et al. (1998) Biochemistry 37, 16601−16611. Mutations K164Aα, H248Aβ, and Y300Fβ were prepared and analyzed by single turnover kinetics and ligand binding studies. These mutations do not significantly affect the enzyme affinity for FPP but do decrease the farnesylation rate constant by 30-, 10-, and 500-fold, respectively. These mutations have little effect on the pH and magnesium dependence of the farnesylation rate constant, demonstrating that the side chains of K164α, Y300β, and H248β do not function either as general acid−base catalysts or as magnesium ligands. Mutation of H248β and Y300β, but not K164α, decreases the farnesylation rate constant using farnesyl monophosphate (FMP). These data suggest that, contrary to the conclusions derived from analysis of the static crystal structures, the transition state for farnesylation is stabilized by interactions between the α-phosphate of the isoprenoid substrate and the side chains of Y300β and H248β. These results suggest an active substrate conformation for FTase wherein the C1 carbon of the FPP substrate moves toward the zinc-bound thiolate of the protein substrate to react, resulting in a rearrangement of the diphosphate group relative to its ground state position in the binding pocket.