Combined quantum mechanical/molecular mechanical (QM/MM) techniques have been applied to investigate the detailed reaction mechanism of the first step of the acylation process by furin in which the cleavage site of the highly pathogenic avian influenza virus subtype H5N1 (HPH5) acts as its substrate. The energy profile shows a simultaneous mechanism, known as a concerted reaction, of the two subprocesses: the proton transfer from Ser368 to His194 and the nucleophilic attack on the carbonyl carbon of the scissile peptide of the HPH5 cleavage site with a formation of tetrahedral intermediate (INT). The calculated energy barrier for this reaction is 16.2 kcal·mol ^-1 at QM/MM B3LYP/6-311G*//PM3-CHARMM22 level of theory. Once the reaction proceeds, the ordering of the electrostatic stabilization by protein environment is of the enzyme-substrate < transition state < INT complexes. Asp153 was found to play the most important role in the enzymatic reaction by providing the highest degree of intermediate complex stabilization. In addition, the negatively charged carbonyl oxygen of INT is well stabilized by the oxyanion hole constructed by Asn295's carboxamide and Ser368's backbone. © 2008 Wiley-Liss, Inc.