The catalytic mechanism of the retaining beta-glucosidase (Abg) from Agrobacterium faecalis involves a double-displacement process in which an alpha-glucosyl-enzyme intermediate is formed with general acid catalytic assistance and then hydrolyzed with general base assistance. Glu170 was identified as an important residue, possibly the acid/base catalyst, on the basis of sequence alignments. This glutamate is conserved in almost all enzymes in family 1 of glycoside hydrolases. Detailed pre-steady-state and steady-state kinetic analyses of the mutant E170G suggested very strongly that Glu170 is the acid/base catalyst. First, kcat values were invariant with pH over the range of 5.0-9.0. Secondly, rates of formation of the glycosyl-enzyme, calculated from kcat/Km and k2, were similar to those of wild-type enzyme for substrates not requiring protonic assistance but dramatically reduced for those needing acid catalysis. Thirdly, addition of azide as a competitive nucleophile increased kcat values 100-300-fold for substrates whose rate-limiting step is deglycosylation, yielding beta-glucosyl azide, but had no effect on the wild-type enzyme. Other anionic nucleophiles had similar, but less dramatic effects. Previous results [Gebler, J.C., et al. (1995) 34, 14547-14553] had indicated that Tyr298F is important for catalysis. The kinetic consequences of the mutations in the double mutant E170G-Y298F are additive, resulting in a 10(6)-fold reduction in kcat values and allowing the accumulation of a stable (t1/2 > 7 h) glucosyl-enzyme intermediate. Thus, Glu170 and Tyr298 function independently, and a possible role for Tyr298 in modulating the pKa of the catalytic nucleophile is proposed.