O6-Alkylguanine-DNA alkyltransferase (AGT) repairs O6-methylguanine (O6mG) in DNA that is known to cause Mutation and cancer. On the basis of Calculations performed using density functional theory involving the active site of AGT, a mechanism for catalytic demethylation of O6mG to guanine has been proposed. In this mechanism, roles of six amino acids, i.e., Cys145, His 146, Glu172, Tyr114, Lys165, and Ser159 in catalytic demethylation of O6mG are involved. This mechanism has three steps as follows. At the first step, Cys145 in the Cys145-water-His146-Glu172 tetrad is converted to cysteine thiolate anion while at the second step, abstraction of the Tyr114 proton by the N3 site of O6mG occurs in a barrierless manner. In the third step, abstraction of Lys165 proton by deprotonated Tyr114 and transfer of the methyl group of O6mG to the thiolate group of Cys145 anion Occur simultaneously. As AGT is a major target in cancer therapy, identification of the roles of the different amino acids in demethylation of O6mG is expected to be useful in designing efficient AGT inhibitors.