1. Oligonucleotide-directed mutagenesis of APH(3')-II was used to investigate the functions of key amino acids in the P-loop analogous motif of the enzyme. 2. The mutations of Gly205 --> GIu, Gly210 --> Ala and Arg211 --> Pro considerably reduced the resistance of the resulting strains to KM and to related drugs, e.g. G418. 3. Similarly, enzyme activity in the crude extracts of these mutants was substantially reduced as well as the enzyme's affinity for Mg2+ ATP. 4. Alternatively substitutions at a highly conserved basic residue (Arg211 --> Lys and Arg211 --> His) were not sufficient for the enzyme to sustain the activity at a level comparable to that of the wildtype. 5. Moreover, an Arg211 --> His mutation drastically reduced affinity of the enzyme for Mg2+ ATP. 6. This argues the importance of Arg211 residue in contributing to the formation of the P-loop structure in addition to its involvement in phosphoryl transfer reaction. 7. Computer analysis of the secondary structure predicted that the APH(3')-II loop connects a beta-strand to an alpha-helix and that the above mutations caused varying degrees of structural distortions at the corresponding regions of the protein.