To examine the roles of the proximal thiolate iron ligand, the C357H mutant of P450(cam) (CYP101) was characterized by resonance Raman, UV, circular dichroism, and activity measurements. The C357H mutant must be reconstituted with hemin for activity to be observed. The reconstituted enzyme is a mixture of high and low spin species. Low temperature (10 degrees C), low enzyme concentration (1 microM), high camphor concentration (1 mM), and 5--50 mM buffer concentrations increase the high to low spin ratio, but under no conditions examined was the protein more than 60% high spin. The C357H mutant has a poorer K(m) for camphor (23 vs 2 microM) and a poorer K(d) for putidaredoxin (50 vs 20 microM) than wild-type P450(cam). The mutant also exhibits a greatly decreased camphor oxidation rate, elevated uncoupling rate, and much greater peroxidase activity. Electron transfer from putidaredoxin to the mutant is much slower than to the wild-type even though redox potential measurements show that the electron transfer remains thermodynamically favored. These experiments confirm that the thiolate ligand facilitates the O--O bond cleavage by P450 enzymes and also demonstrate that this ligand satisfies important roles in protein folding, substrate binding, and electron transfer.