The active-site dynamics of arginine deiminase (ADI) complexed with the arginine substrate are investigated with ns molecular dynamics for the wildtype ADI and several mutants. It is shown that the substrate is held in the active site by an extensive hydrogen bond network, which may be weakened by substitution of active-site residues. In addition, the initial step of the catalysis is explored in several truncated active-site models with density functional theory. Evidence is presented in support of the hypothesis that the nucleophilic attack of the ADI Cys thiol at the guanidino carbon of the substrate is initiated by substrate-mediated proton transfer to a His residue in the catalytic triad (Cys-His-Glu). In addition, the active-site residues are found to strongly influence the reaction profile, consistent with their important role in catalysis.