We have examined the reaction of N-(benzyloxycarbonyl)-L-alanyl-L-glycyl-L-phenylalanyl chloromethyl ketone (ZAGFCMK) with chymotrypsin (Cht) and have found that, in addition to irreversible alkylation of the enzyme, some of the corresponding hydroxymethyl ketone is produced. For each molecule of hydroxy ketone formed, 3.6 molecules of chymotrypsin are inactivated. Chloroketone hydrolysis is also observed with chymotrypsin methylated at N-3 of the active site histidine (MeCht). The hydrolysis proceeds slowly (k = 0.14 min-1). Alkylation of the modified enzyme was not observed. An initial burst of free chloride is detected during the MeCht-catalyzed hydrolysis. The magnitude of the chloride burst is proportional to the enzyme concentration in an approximate 1:1 stoichiometry and indicates a relatively rapid chloride-releasing step which gives rise to an intermediate which is more slowly converted to hydroxy ketone. We have also investigated both the solution and MeCht-mediated hydrolysis of the S isomer of N-acetyl-L-alanyl-L-phenylalanyl chloroethyl ketone (S-AcAFCEK). We have concluded that the nonenzymatic hydrolysis proceeds with inversion of configuration at the stereocenter, while the enzymatic process occurs with retention of configuration. The two nucleophilic displacements attending the MeCht-mediated hydrolysis of S-AcAFCEK imply the formation of an intermediate, possibly of an epoxy ether, formed by internal displacement of the chloride by the oxyanion of the initially generated enzyme-chloroketone hemiketal adduct.