Macrophage migration inhibitory factor (MIF) is an immunoregulatory protein that is a potential therapeutic target for a number of inflammatory diseases. Evidence exists that an unexpected catalytic active site of MIF may have a biological function. To gain further insight into the role of the catalytic active site, a series of mutational, structural, and biological activity studies were performed. The insertion of an alanine between Pro-1 and Met-2 (PAM) abolishes a non-physiological catalytic activity, and this mutant is defective in the in vitro glucocorticoid counter-regulatory activity of MIF. The crystal structure of MIF complexed to (S,R)-3-(4-hydroxyphenyl)-4,5-dihydro-5-isoxazole acetic acid methyl ester (ISO-1), an inhibitor of MIF d-dopachrome tautomerase activity, reveals that ISO-1 binds to the same position of the active site as p-hydroxyphenylpyruvic acid, a substrate of MIF. ISO-1 inhibits several MIF biological activities, further establishing a role for the catalytic active site of MIF.