Enzymes of carbohydrate esterase (CE) family 14 catalyze hydrolysis of N-acetyl groups at the non-reducing end of the N-acetylglucosamine (GlcNAc) residue of chitooligosaccharides or related compounds. N,N'-diacetylchitobiose deacetylase (Dac) belongs to the CE-14 family and plays a role in the chitinolytic pathway in archaea by deacetylating N,N'-diacetylchitobiose (GlcNAc(2)), which is the end product of chitinase. In this study, we revealed the structural basis of reaction specificity in CE-14 deacetylases by solving a crystal structure of Dac from Pyrococcus horikoshii (Ph-Dac) in complex with a novel reaction intermediate analog. We developed 2-deoxy-2-methylphosphoramido-D-glucose (MPG) as the analog of the tetrahedral oxyanion intermediate of the monosaccharide substrate GlcNAc. The crystal structure of Ph-Dac in complex with MPG demonstrated that Arg92, Asp115, and His152 side chains interact with hydroxyl groups of the glucose moiety of the non-reducing-end GlcNAc residue. The amino acid residues responsible for recognition of the MPG glucose moiety are spatially conserved in other CE-14 deacetylases. Molecular dynamics simulation of the structure of the Ph-Dac-GlcNAc(2) complex indicated that the reducing GlcNAc residue is placed in a large intermolecular cleft and is not involved with specific interactions with the enzyme. This observation was consistent with results indicating that Ph-Dac displayed similar kinetic parameters for both GlcNAc and GlcNAc(2). This study provides the structural basis of reaction-site specificity of Dac and related CE-14 enzymes. (C) 2016 Elsevier Inc. All rights reserved.