Escherichia coli alkaline phosphatase (AP) can hydrolyze a variety of chemically diverse phosphate monoesters while making contacts solely to the transferred phosphoryl group and its incoming and outgoing atoms. Strong interactions between AP and the transferred phosphoryl group are not present in the ground state despite the apparent similarity of the phosphoryl group in the ground and transition states. Such modest ground-state affinity is required to curtail substrate saturation and product inhibition and to allow efficient catalysis. To investigate how AP achieves limited affinity for its ground state, we first compared binding affinities of several related AP ligands. This comparison revealed a paradox: AP has a much stronger affinity for inorganic phosphate (P-i) than for related compounds that are similar to P-i geometrically and in overall charge but lack a transferable proton. We postulated that the P-i proton could play an important role via transfer to the nearby anion, the active site serine nucleophile (Ser102), resulting in the attenuation of electrostatic repulsion between bound P-i and the Ser102 oxyanion and the binding of P-i in its trianionic form adjacent to a now neutral Ser residue. To test this model, isotope-edited Fourier transform infrared (FTIR) spectroscopy was used to investigate the ionic structure of AP-bound P-i. The FTIR results indicate that the P-i trianion is bound and, in conjunction with previous studies of pH-dependent P-i binding and other results, suggest that P-i dianion transfers its proton to the Ser102 anion of AP. This internal proton-transfer results in stronger P-i binding presumably because the additional negative charge on the trianionic P-i allows stronger electrostatic interactions within the AP active site and because the electrostatic repulsion between bound P-i and anionic Ser102 is eliminated when the transferred P-i proton neutralizes Ser102. Indeed, when Ser102 is neutralized the P-i trianion binds AP with a calculated K-d of <= 290 fM. These results suggest that electrostatic repulsion between Ser102 and negatively charged phosphate ester substrates contributes to catalysis by the preferential destabilization of the reaction's E.S ground state.