Caspases are fundamental targets for pharmaceutical interventions in a variety of diseases involving disregulated apoptosis. Here, we present a quantum mechanics/mol. mechanics Car-Parrinello study of key steps of the enzymic reaction for a representative member of this family, caspase-3. The hydrolysis of the acyl-enzyme complex is described at the d. functional (BLYP) level of theory while the protein frame and solvent are treated using the GROMOS96 force field. These calcns. show that the attack of the hydrolytic water mol. implies an activation free energy of .apprx.DFA ~ 19+-4 kcal/mol in good agreement with exptl. data and leads to a previously unrecognized gem-diol intermediate that can readily (DFA ~ 5+-3 kcal/mol) evolve to the enzyme products. Our findings assist in elucidating the striking difference in catalytic activity between caspases and other structurally well-characterized cysteine proteases (papains and cathepsins) and may help design novel transition-state analog inhibitors. [on SciFinder (R)]