Modular polyketide synthases (PKSs) are multienzyme complexes that synthesize the polyketide core of many important pharmaceuticals such as antibiotic erythromycin A. The terminal thioesterase (TE) domain of 6-deoxyerythronolide B synthase (DEBS) is responsible for catalyzing the cyclization and release of the polyketide chain by macrolactonization. The incorporation of DEBS TE domain into engineered PKSs has enabled the biosynthesis of novel polyketides of varying ring size, thus suggesting that there is a substrate tolerance in DEBS TE catalysis. Using molecular modeling and crystal structure data, we have identified twelve amino acids at or near the active site of DEBS TE that are expected to be important for substrate specificity and stereo-selectivity. Each of the suspected amino acids was individually replaced with alanine via site-directed mutagenesis to generate twelve DEBS TE mutants. Four different model substrates have been tested for TE catalyzed hydrolysis with both wide-type and mutants in vitro. All DEBS TE mutants tested so far displayed no or little catalytic activity in substrate hydrolysis, which suggests that the mutated amino acid residues are essential for substrate recognition and/or structural stability of protein. Terminal thioesterase domain is necessary for catalytic turnover of polyketide synthases. Knowledge of the interactions between substrate and DEBS TE domain is important for engineering TE domains that catalyze the macrolactonization of structural novel polyketides.