Multicopper oxidases catalyze the four-electron reduction of dioxygen to water without the release of any reactive oxygen intermediate species. The role of carboxylate residue Asp116 located at the exit channel for water molecules of CotA-laccase has been investigated by site-saturation mutagenesis. A total of 300 clones was picked and screened for activity. Five variant enzymes, D116E, D116A, D116N, D116T and D116L, were selected for further characterisation. Spectroscopic analysis revealed only small perturbations in the geometry of the catalytic Cu sites of variants. However, a severe drop in turnover numbers (k(cat)) and downshifts by approximately 1-2 units of the optimal pH were observed for the oxidation of substrates, as compared with the wild type. The kinetics of formation and decay of peroxide intermediate (PI) was studied in type 1 depleted (T1D) CotA-laccase and in T1D-D116 or T1D-E498 mutants, previously shown to be involved in the mechanism of dioxygen reduction. It is noteworthy that CotA shows 10 times lower rates of PI formation and 103 higher PI decay rates as compared with other studied multicopper oxidases. The generation of PI is pH independent and mostly unaffected by the D116 or E498 mutations. In contrast, the decay of PI is markedly compromised by the replacement of D116 or E498 with non-carboxylate residues. The E498 residue appears to be the main protonable species for acceleration of PI decay at low pH. The D116 residue seems to be essential in the modulation of E498 protonation and in assisting protons to hydroxyl groups bound to the T2 Cu.