The Cys-His-Asp catalytic triad found in dienelactone hydrolase (DLH) is unusual for several reasons. It has not been observed in other hydrolytic enzymes and it is virtually inactive when it is produced by she-directed mutagenesis in the proteases. We propose a model to explain why this triad is catalytically active in DLH but not in the proteases. In the resting state of DLH, His202 forms an ion pair with Aspl71 and Cysl23 exists as a thiol. The resting state thiol does not interact with His202 in the active site but instead forms a hydrogen bond with Glu36 in the interior of the molecule. In the absence of substrate, Glu36 is also ion paired with Arg206. When substrate binds, Arg206 forms a second ion pair with the anionic substrate and the Arg206/Glu36 ion pair weakens. The destabilized Glu36 carboxylate shifts towards and deprotonates the Cysl23 thiol, thereby activating the nudeophile. As the thiolate anion is not energetically favoured in the hydrophobic interior of the enzyme, it swings into the active site where it can be stabilized by the His202 imidazolium and the dipole of helix C. The Cysl23 thiolate which now lies adjacent to the acyl carbon of the substrate, is thus generated only in the presence of substrate. The mode of thiolate activation reduces the susceptibility of DLH towards thiol alkylating agents.