Muscle carnitine palmitoyltransferase I (M-CPTI) catalyzes the conversion of long-chain fatty acyl-CoAs to acylcarnitines in the presence of L-carnitine. To determine the role of the C-terminal region of M-CPTI in enzyme activity, we constructed a series of deletion and substitution mutants. The mutants were expressed in the yeast Pichia pastoris, and the effect of the mutations on M-CPTI activity and malonyl-CoA sensitivity was determined in isolated mitochondria prepared from the yeast strains expressing the wild-type and deletion mutants. Deletion of the last 210, 113, 44, 20, 10, and 9 C-terminal amino-acid residues resulted in an inactive M-CPTI, but deletion of the last 8, 7, 6, and 3 C-terminal residues had no effect on activity, demonstrating that leucine-764 (L764) is essential for catalysis. Substitution of L764 with alanine caused a 40% loss in catalytic activity, but replacement of L764 with arginine resulted in an 84% loss of activity; substitution of L764 with valine had no effect on catalytic activity. The catalytic efficiency for the L764R mutant decreased by 80% for both substrates. Secondary structure prediction of the M-CPTI sequence identified a 21-amino-acid residue, 744-764, predicted to fold into a coiled-coil alpha-helix in the extreme C-terminal region of M-CPTI that may be important for native folding and activity. In summary, our data demonstrate that deletion of L764 or substitution with arginine inactivates the enzyme, suggesting that L764 may be important for proper folding of M-CPTI and optimal activity.