The protein hydrolysis mechanism by the HIV-1 protease (HIV-1 PR) was studied using ab initio molecular orbital calculations with a model compound. The initial model compound was constructed based on the result of a 100 ps molecular dynamics (MD) simulation of the enzyme-substrate (ES) complex under physiologic conditions, and consists of an acetate/acetic acid pair for the two catalytic-site Asp residues, a water molecule acting on the hydrolysis, and a dimethylacetamide for the substrate. This study suggests that the hydrolysis mechanism of the Phe-Propeptide bond specific to the HIV-1 PR consists of three elementary reactions: first, the reaction of the formation of the amide hydrate intermediate; second, the reaction of the protonation of the proline nitrogen of the substrate; and third, the reaction of the C-N bond cleavage of the substrate. The rate-determining step is the protonation of the substrate proline nitrogen, and its activation energy is 23.95 kcal/mol. This result strongly suggests that protein hydrolysis by the HIV-1 PR occurs in vivo.