A hybrid numerical method, which employs molecular mechanics to describe the bulk of the solvent-protein matrix and a semiempirical quantum-mechanical treatment for atoms near the reactive site, was utilized to simulate the minimum energy surface and reaction pathway for the interconversion of malate and oxaloacetate catalyzed by the enzyme malate dehydrogenase (MDH). A reaction mechanism for proton and hydride transfers associated with MDH and cofactor nicotinamide adenine dinucleotide (NAD) is deduced from the topology of the calculated energy surface. The proposed mechanism consists of (1) a sequential reaction with proton transfer preceding hydride transfer (malate to oxaloacetate direction), (2) the existence of two transition states with energy barriers of approximately 7 and 15 kcal/mol for the proton and hydride transfers, respectively, and (3) reactant (malate) and product (oxaloacetate) states that are nearly isoenergetic. Simulation analysis of the calculated energy profile shows that solvent effects due to the protein matrix dramatically alter the intrinsic reactivity of the functional groups involved in the MDH reaction, resulting in energetics similar to that found in aqueous solution. An energy decomposition analysis indicates that specific MDH residues (Arg-81, Arg-87, Asn-119, Asp-150, and Arg-153) in the vicinity of the substrate make significant energetic contributions to the stabilization of proton transfer and destabilization of hydride transfer. This suggests that these amino acids play an important role in the catalytic properties of MDH.