Soluble guanylyl cyclase, a heterodimeric enzyme, is the most important intracellular target for the signalling molecule nitric oxide (NO). NO stimulates the enzyme by binding to a prosthetic heme group. The identity of the axial heme ligand, however, is still unknown. Here we show that guanylyl cyclase mutated at the residue His 105 on the beta 1 subunit, a mutant that we have shown before to contain no heme after purification [Wedel, B., Humbert, P., Harteneck, C., Foerster, J., Malkewitz, J., Böhme, E., Schultz, G. & Koesling, D. (1994) Proc. Natl Acad. Sci. USA 91, 2592-2596] can be reconstituted with heme. The reconstituted mutant remains NO-insensitive and displays an ultraviolet absorption spectrum consistent with an altered axial coordination. Thus, this residue is a strong candidate for the axial heme-ligating residue and appears to be necessary for NO stimulation. Apart from the axial heme ligand, the role of the enzyme's two subunits, alpha 1 and beta 1, in heme binding has not been clarified to date. To address this question, we purified mutant heterodimers in which the non-conserved amino termini of either alpha 1 (131 residues deleted), or beta 1 (64 residues) have been deleted. These deletion mutants had previously been found to be marginally (alpha 1 truncated) or not at all NO sensitive (beta 1 truncated) in cytosolic fractions [Wedel, B., Harteneck, C., Foerster, J., Friebe, A., Schultz, G. & Koesling, D. (1995) J. Biol. Chem. 270, 24871-24875]. Here, we show that the purified enzyme truncated on alpha 1 has a significantly reduced capacity to bind heme which explains the reduced NO sensitivity. By contrast, the beta 1-truncated enzyme binds an amount of heme comparable to the wild type but is only marginally NO-responsive and displays a shift in the heme ultraviolet absorption maximum indicative of altered heme coordination. In conclusion, the heme binding site of soluble guanylyl cyclase requires the presence of both subunits in full length to be able to bind wild-type quantities of heme and to be capable of mediating the NO-heme-induced stimulation. Despite some structural similarity, both subunits appear to participate differently in NO-heme-mediated enzyme regulation.