Objectives To elucidate the molecular mechanisms involved in the substrate interaction of the bile salt hydrolase of Lactobacillus reuteri CRL 1098 (LrBSH) with bile acids (BAs) and to evaluate potential enzyme inhibitors based on computer and in vitro modeling assays. Results Asp19, Asn79, and Asn171 participated in the LrBSH interaction with all BAs tested while Leu56 and Glu 222 played an important role in the interaction with glyco- and tauro-conjugated BAs, respectively. A great percentage of hydrophobic and polar interactions were responsible for the binding of LrBSH with glyco- and tauro-conjugated BAs, respectively. Remarkably, the four binding pocket loops participated in the substrate binding site of LrBSH unlike most of the reported BSHs. Inhibition assays showed that ascorbic acid, citric acid, penicillin G, and ciprofloxacin decreased LrBSH activity by 47.1%, 40.14%, 28.8%, and 9%, respectively. Docking analysis revealed that tetracycline and caffeic acid phenethyl ester had the low binding energy (-7.32 and -7.19 kcal/mol, respectively) and resembled the interaction pattern of GDCA (-6.88 kcal/mol) while penicillin (-6.25 kcal/mol) and ascorbic acid (-5.98 kcal/mol) interacted at a longer distance. Conclusion This study helps to delve into the molecular mechanisms involved in the recognition of substrates and potential inhibitors of LrBSH.