In baker's yeast (Saccharomyces cerevisiae) the hexokinases PI (Hxk1) and PII (Hxk2) are required for triggering of the activation of the Ras-cAMP pathway and catabolite repression. Specifically, Hxk2 is essential for the establishment of glucose repression, whereas either Hxk1 or Hxk2 can sustain fructose repression. Previous studies have suggested that the extent of glucose repression is inversely correlated with hexokinase catalytic activity and hence with an adequate elevation of intracellular sugar phosphate levels. However, several lines of evidence indicate that glucose 6-phosphate is not the trigger of catabolite repression in yeast. In the present study we employed site-directed mutagenesis of amino acids important for the binding of sugar and ATP, for efficient phosphoryl transfer and for the closure of the substrate-binding cleft, to obtain an insight into the structural requirements of Hxk2 for sugar-induced signalling. We show that the ATP-binding Lys-111 is not essential for catalysis in vivo or for signal triggering. Substitution of the catalytic-centre Asp-211 caused loss of catalytic activity, but high-affinity sugar binding was retained. However, this was not sufficient to cause cAMP activation nor catabolite repression. Mutation of Ser-158 abrogated glucose-induced, but not fructose-induced, repression. Moreover, 2-deoxyglucose sustained repression despite an extremely low catalytic activity. We conclude that the establishment of catabolite repression is dependent on the onset of the phosphoryl transfer reaction on hexokinase and is probably related to the stable formation of a transition intermediate and concomitant conformational changes within the enzyme. In contrast, the role of Hxk2 in Ras-cAMP activation seems to be directly connected to its catalytic function. The implications of this model are discussed.