The segment ⁷⁰⁸TGDGVNDSPALKK⁷²⁰ in the α-subunit P domain of Na,K-ATPase is highly conserved among cation pumps, but little is known about its role in binding of Mg²⁺ or ATP and energy transduction. Here, 11 mutations of polar residues are expressed at reduced temperature in yeast with preserved capacities for high affinity binding of ouabain and ATP, whereas the Thr⁷⁰⁸ → Ser mutation and alterations of Asp⁷¹⁴ abolish all catalytic reactions. In mutations of Asp⁷¹⁰ and Asn⁷¹³, ATP affinity is preserved or increased, whereas Na,K-ATPase activity is severely reduced. Assay of phosphorylation from ATP in the presence of oligomycin shows that Asp⁷¹⁰ contributes to coordination of Mg²⁺ during transfer of γ-phosphate to Asp³⁶⁹ in the high energy Mg·E₁P[3Na] intermediate and that Asn⁷¹³ is involved in these processes. In contrast, Asp⁷¹⁰ and Asp⁷¹³ do not contribute to Mg²⁺ binding in the E₂P·ouabain complex. Transition to E₂P thus involves a shift of Mg²⁺ coordination away from Asp⁷¹⁰ and Ash⁷¹³, and the two residues become more important for hydrolysis of the acyl phosphate bond at Asp³⁶⁹. The Asp⁷¹⁰ → Ala mutation blocks interaction with vanadate, whereas Ash⁷¹³ → Ala interferes with phosphorylation from P(i) of the E₂·ouabain complex, showing that the GDGVND segment is required for stabilization of the transition state and for the phosphorylation reaction. The Asp⁷¹⁰ → Ala mutation also interferes with transmission of structural changes to the ouabain site and reduces the affinity for binding of Tl⁺ 2- to 3-fold, suggesting a role in transmission of K⁺ simulation of phospho-enzyme hydrolysis from transmembrane segment 5 to the P domain.