The reaction mechanism of nucleophilic aromatic substitution of 1-chloro-2,4-dinitrobenzene by glutathione (as modeled by a thiomethoxide ion) in the gas phase and in solution was elucidated using nb initio molecular orbital theory in combination with a continuum solvent model at the HF/6-31G*, HF/6-31+G**, and MP2/6-31+G** levels of theory. Two ion-molecule complexes were located in the gas phase at the HF level, but only one exits at the MP2/6-31fG** level, while neither exits in aqueous solution. In aqueous solution, there is a large free energy barrier and C-S bond formation is the rate-determining step, which is in agreement with experimental observation. The calculated free energy barrier (30.2 kcal/mol) at the HF/6-31+G** level of theory seems to be in good agreement with experiment (23.8 kcal/mol), while the MP2/6-31+G** barrier is too low, indicating that the MP2/6-31+G** level of theory probably overestimates the stability of the transition state for C-S bond formation. Implications for the mode of action of glutathione S-transferases (GSTs) and a related enzyme are discussed in light of the results of the current study.