Peptide aldehydes and serine proteases combine to form hemiacetals which are analogues of the transition state for substrate hydrolysis. The free energies of hemiacetal bond formation have been determined for a number of peptide aldehydes and serine proteases by comparing the binding constants of the aldehydes with those of the analogous peptide amides. This free energy is found to be very dependent on the contact between the enzyme and the P1 “side chain” of the peptide aldehyde. For chymotrypsin and two chymotrypsin-like enzymes, the free energy of the hemiacetal bond is almost 3 kcal mol-1 greater when this side chain is a benzyl group than when it is a hydrogen atom. For elastase the free energy of bond formation is also close to 3 kcal mol-1 greater for a methyl than a hydrogen “side chain”. Earlier work has shown that the free energy of this “side-chain” contact in noncovalent enzyme-substrate complexes is not greatly affected by small displacements of the substrate. It is therefore unlikely that the enthalpy of the side-chain contact will differ in the amide and hemiacetal complexes. We may conclude that the contact between the benzyl group and the chymotrypsin-like proteases affects mainly the entropy of hemiacetal bond formation, making this quantity less negative by approximately 10 eu mol-1. The contact between a methyl “side chain” and elastase makes the entropy of hemiacetal bond formation with this enzyme less negative by approximately 9 eu mol-1. A corollary of these findings is that the side chain will increase the entropy loss associated with noncovalent complex formation between the aldehyde and enzyme by at least 10 eu mol-1. Noncovalent complexes between serine proteases and specific ligands are therefore characterized by a low internal mobility, and covalent reactions within these complexes should occur with abnormally favorable entropies. The catalytic mechanism of the serine proteases involves as its rate-determining step a reaction very similar to hemiacetal bond formation. Application of the principles discussed above indicates that this reaction will occur with an abnormally low entropy of activation. Our results therefore support the hypothesis that a substantial part of the catalytic power of serine proteases is due to their reducing the entropy loss associated with the rate-determining step of reaction. © 1979, American Chemical Society. All rights reserved.