In the family of acyl-coenzyme A binding proteins, a subset of 26 sequence sites are identical in all eukaryotes and conserved throughout evolution of the eukaryotic kingdoms. In the context of the bovine protein, the importance of these 26 sequence positions for structure, function, stability, and folding has been analyzed using single-site mutations. A total of 28 mutant proteins were analyzed which covered 17 conserved sequence positions and three nonconserved positions. As a first step, the influence of the mutations on the protein folding reaction has been probed, revealing a folding nucleus of eight hydrophobic residues formed between the N- and C-terminal helices [Kragelund, B. B., et al. (1999) Nat. Struct. Biol. (In press)]. To fully analyze the role of the conserved residues, the function and the stability have been measured for the same set of mutant proteins. Effects on function were measured by the extent of binding of the ligand dodecanoyl-CoA using isothermal titration calorimetry, and effects on protein stability were measured with chemical denaturation followed by intrinsic tryptophan and tyrosine fluorescence. The sequence sites that have been conserved for direct functional purposes have been identified. These are Phe5, Tyr28, Tyr31, Lys32, Lys54, and Tyr73. Binding site residues are mainly polar or charged residues, and together, four of these contribute approximately 8 kcal mol-1 of the total free energy of binding of 11 kcal mol-1. The sequence sites conserved for stability of the structure have likewise been identified and are Phe5, Ala9, Val12, Leu15, Leu25, Tyr28, Lys32, Gln33, Tyr73, Val77, and Leu80. Essentially, all of the conserved residues that maintain the stability are hydrophobic residues at the interface of the helices. Only one conserved polar residue, Gln33, is involved in stability. The results indicate that conservation of residues in homologous proteins may result from a summed optimization of an effective folding reaction, a stable native protein, and a fully active binding site. This is important in protein design strategies, where optimization of one of these parameters, typically function or stability, may influence any of the others markedly.