The catalytic motif (YSASK) at the active site of 11beta-hydroxysteroid dehydrogenase type 1 (11beta-HSD1) is conserved across different species. The crystal structures of the human, guinea pig and mouse enzymes have been resolved to help identify the non-conserved residues at the active site. A tyrosine residue (Y177) upstream of the catalytic motif in human 11beta-HSD1 represents the largest difference at the active sites between the human and the rodent enzyme where the corresponding residue is glutamine. Although Y177 was postulated as a potential hydrogen bond donor in substrate binding in crystal structure-based modeling, no experimental evidence is available to support this notion. Here, we report that Y177 is not a hydrogen bond donor in substrate binding because removal of the hydroxyl group from its side chain by mutagenesis (Y177F) did not significantly change the Km value for cortisone. However, removal of the hydrophobic side chain by changing tyrosine to alanine (Y177A) or substitution with a hydrophilic side chain by changing tyrosine to glutamine (Y177Q) increased Km values for cortisone. These data suggest that Y177 is involved in substrate binding through its hydrophobic side chain but not by hydrogen bonding. In addition, the three mutations had little effect on the binding of the rodent substrate 11-dehydrocorticosterone, suggesting that Y177 does not confer substrate specificity. However, the same mutations reduced the affinity of the licorice derived 11beta-HSD1 inhibitor glycyrrhetinic acid by about 6- to 10-fold. Interestingly, the affinity of carbenoxolone, the hemisuccinate ester of glycyrrhetinic acid with a similar potency against the wildtype enzyme, was not drastically affected by the same mutations at Y177. These data suggest that Y177 has a unique role in inhibitor binding. Molecular modeling with glycyrrhetinic acid led to findings consistent with the experimental data and provided potential interaction mechanisms. Our data suggest that Y177 plays an important role in both substrate and inhibitor binding but it is unlikely a hydrogen bond donor for the substrate.