The coordination and binding of the Mg2+ ion in the nucleotide-binding site of p21 have been investigated using site-directed mutagenesis, kinetic methods, and phosphorous NMR. Mg2+ in the p21.nucleotide.Mg2+ complex appears to be in fast equilibrium with the solvent. The dissociation constant between Mg2+ and the p21.GDP complex was determined to be 2.8 microM. It decreases 30- or 16-fold on substituting Ser-17 or Asp-57 with alanine, respectively, whereas the T35A mutation has no effect. All three mutations influence the dissociation constants and the association and dissociation rate constants of the interaction between guanine nucleotides and p21, but to a different degree. We conclude that Thr-35 is only complexed to Mg2+ in the GTP conformation and both Asp-57 and Ser-17 appear to be critical for both GDP and GTP binding. 31P NMR spectra of the GDP and Gpp(NH)p (guanosine-5'-(beta,gamma-imido)triphosphate) complexes of mutated p21 show a remarkable perturbation of the guanine nucleotide-binding site compared to wild-type protein. The mutant proteins show reduced GTPase rates, which are not stimulated by the GTPase-activating protein GAP. p21(S17A) has been reported to function just as p21(S17N) as a dominant negative inhibitor of normal p21. We find that it inhibits oncogenic p21-induced survival of primary neurons.