The L-2-haloacid dehalogenase from the 1,2-dichloroethane-degrading bacterium Xanthobacter autotrophicus GJ10 catalyzes the hydrolytic dehalogenation of small L-2-haloalkanoates to their corresponding D-2-hydroxyalkanoates, with inversion of the configuration at the C-2 atom. The structure of the apoenzyme at pH 8 was refined at 1.5-Angstrom resolution. By lowering the pH, the catalytic activity of the enzyme was considerably reduced, allowing the crystal structure determination of the complexes with L-2-monochloropropionate and monochloroacetate at 1.7 and 2.1 Angstrom resolution, respectively. Both complexes showed unambiguous electron density extending from the nucleophile Asp(8) to the C-2 atom of the dechlorinated substrates corresponding to a covalent enzyme-ester reaction intermediate. The halide ion that is cleaved off is found in line with the Asp8 O delta 1-C-2 bond in a halide-stabilizing cradle made up of Arg(39), Asn(115) and Phe(175). In both complexes, the Asp(8) 0 delta 2 carbonyl oxygen atom interacts with Thr(12), Ser(171) and Asn(173) which possibly constitute the oxyanion hole in the hydrolysis of the ester bond. The carboxyl moiety of the substrate is held in position by interactions with Ser(114), Lys(147) and main chain NR groups. The L-2-monochloropropionate CH3 group is located in a small pocket formed by side chain atoms of Ly(147), Asn(173), Phe(175), and Asp(176). The size and position of the pocket explain the stereospecificity and the limited substrate specificity of the enzyme. These crystallographic results demonstrate that the reaction of the enzyme proceeds via the formation of a covalent enzyme-ester intermediate at the nucleophile Asp(8).