Two acetylation sites on prothrombin fragment 1 (amino-terminal 156 amino acid residues of bovine prothrombin) are essential for the tight calcium and membrane binding functions of the protein; calcium protects both of these sites from acetylation [Welsch, D. J., Pletcher, C. H., & Nelsestuen, G. L. (1988) Biochemistry (first of three papers in this issue)]. The epsilon-amino groups of the lysine residues (positions 3, 11, 44, 57, and 97) were not critical to protein function and were acetylated in the calcium-protected protein. The most reactive of the two essential acetylation sites was identified as amino-terminal alanine. To identify this site, fragment 1 was first acetylated in the presence of calcium to derivatize the nonessential sites. Removal of calcium and partial acetylation with radioactive reagent produced a single major radioactive peptide. Isolation and characterization of this peptide showed that the radioactivity was associated with amino-terminal alanine. In addition, sequence analysis of calcium-protected protein showed the presence of underivatized amino-terminal alanine. Surprisingly, covalent modification with a trinitrophenyl group did not alter membrane binding activity. Thus, the positive charge on the amino terminus did not appear critical to its function. Acetylation of amino-terminal alanine without acetylation of the second essential site produced a fragment 1 derivative which had a high requirement for calcium and which had lost most membrane binding function. However, this protein had only slightly altered affinity for magnesium ion. In agreement with this metal ion selectivity, protection of amino-terminal alanine was calcium specific, and magnesium ion did not protect this site from acetylation.(ABSTRACT TRUNCATED AT 250 WORDS)