The binding of anionic and non-anionic donor substrates to baker's yeast transketolase modified at the arginine residue by 2,3-butanedione was studied. The modified enzyme binds two thiamine pyrophosphate molecules per mole of protein, forms a complex with a charge transfer as recorded by circular dichroism (CD) spectra and retains its ability to bind anionic and non-anionic substrates. The values of the binding constants as determined from the CD spectra remain either unchanged or are changed very slightly. The values of the kinetic parameters, Km and V, for the transketolase-catalyzed oxidation reaction in the presence of anionic and non-anionic donor substrates were calculated. The Km values for both substrate groups were not affected by the enzyme modification, while those of V were decreased 5-10 times. The experimental data suggest that the arginine residue is not involved in the enzyme binding to the substrates but is catalytically essential.