The various steps in a mechanism for the diol dehydrase reaction in which a carboxylic acid group of an amino acid residue at the active site of the enzyme serves as an additional cofactor have been investigated using density functional theory (B3LYP) calculations. This mechanism involves a neutral radical rather than a protonated radical (radical cation). 1,2-Dihydroxyethane was chosen as the substrate, and formic acid was selected as a model for the carboxylic acid group. The 1,2-dihydroxyeth-1-yl radical (produced by H-atom transfer from the substrate to the 5'-deoxyadenosyl radical) forms a nine-membered ring structure with the formic acid. There are two intermolecular hydrogen bonds in this ring structure-one with the OH of the C-OH group in the radical as a hydrogen donor and the C=O group in the formic acid as an acceptor, and the other with the OH of the C-OH group in the radical as an acceptor and the C-OH group of the formic acid as a hydrogen donor. Bond rearrangement within this hydrogen-bonded ring structure results in the formation of a hydrogen-bonded product in which transfer of the radical center from one carbon atom to the adjacent carbon atom has taken place. Fission of the C-O bond at the new radical center leads to the elimination of H2O and the separation of the formylmethyl radical from which acetaldehyde is formed by H-atom transfer. The interchange of the HO-C and C=O bonding in the carboxylic acid group is an overall feature of the mechanism. Furthermore, like the radical, the substrate diol is found to form a nine-membered ring structure with formic acid; this contains two intermolecular hydrogen bonds analogous to those formed between the radical and formic acid. This finding provides support for the hypothesis that two-point attachment of the substrate via its HO groups to the enzyme occurs prior to the H-atom transfer, which initiates the dehydration process. Geometries, energies, and entropies are reported for the hydrogen-bonded reactant ring structure, for the transition state, for a hydrogen-bonded product structure, and for all the separate molecules. Enthalpy, entropy, and free energy changes for the various steps have been calculated from these data, which relate to the gas phase, and for the corresponding reactions at the active site where the restricted spatial environment results in a much diminished translational entropy. Modified entropy values have accordingly been employed by taking the liquid state as the model, evaluating S-liq(298) using the empirical equation, S-liq(298) = S-internal(298) + 15.8. Further calculations suggest that polarization within the protein cavity containing the active site has a very small effect on the barrier height and the exothermicity of the dehydration process. Rate constants calculated from computed free energies of activation for the dehydration via an HO-bridge structure (transition state), and via fragmentation giving the HO-radical and syn-vinyl alcohol, are far smaller than the experimentally determined rate constant, whereas that calculated for the formic acid cofactor mechanism is of the same order of magnitude as the experimental value.