Heparinases are bacterial enzymes that are powerful tools to study the physiological roles of heparin-like complex polysaccharides. In addition, heparinases have significant therapeutic applications. We had proposed earlier that cysteine 135 and histidine 203 together form the catalytic domain in heparinase I. We had also identified a heparin binding domain in heparinase I containing two positively charged clusters HB-1 and HB-2 in a primary heparin binding site and other positively charged residues in the vicinity of cysteine 135. In this study, through systematic site-directed mutagenesis studies, we show that the alteration of the positive charge of the HB-1 region has a pronounced effect on heparinase I activity. More specifically, site-directed mutagenesis of K199A (contained in HB-1) results in a 15-fold reduction in catalytic activity, whereas a K198A mutation (also in HB-1) results in only a 2- to 3-fold reduction in heparinase I activity. A K132A mutation, in close proximity to cysteine 135, also resulted in reduced (8-fold) activity. Heparin affinity chromatography experiments indicated moderately lowered binding affinities for the K132A, K198A, and the K199A mutant enzymes. The above results, taken together with our previous observations, lead us to propose that the positively charged heparin binding domain provides the necessary microenvironment for the catalytic domain of heparinase I. The dominant effect of lysine 199 suggests an additional, more direct, role in catalysis for this residue.