Proposals for the catalytic mechanism of glycogen phosphorylase based on crystallographic studies with the T-state form of the enzyme are reviewed in the light of new structural data from studies with the R-state enzyme. The observed position for a sulfate ion at the catalytic site and the crystallographic binding studies of glucose-1-P to the R-state enzyme support the previous proposals in which the 5'-phosphate group of the essential cofactor pyridoxal phosphate functions as an acid-base to promote attack by the substrate phosphate on the polysaccharide substrate. The sulfate (phosphate) recognition site, which is fully formed only in the R state, comprises interactions from the side chains of Arg-569 and Lys-574 and the main chain nitrogen of Gly-135 at the start of an alpha-helix. The interactions of the cofactor 5'-phosphate do not change between the T and the R state. Other groups on the protein play important roles in binding the substrate but are not involved in the catalytic reaction. The presumed reactive conformation of bound substrate has been observed with heptulose-2-P in the T state and in this conformation stereoelectronic arguments suggest the C(1)-O(1) bond is weakened. For the natural substrate glucose-1-P it is proposed that the reactive conformation is achieved only in the presence of the oligosaccharide component in the reactive ternary enzyme-substrate complex. The phosphate recognition sites are discussed.