We report ab initio calculations on a cluster model for the active site of the enzyme carbonic anhydrase that considers the effect of the ionicity of the site on the energetics of ligand binding and reaction behavior. Hydrolysis occurs by a direct attack of the Zn-bound hydroxyl oxygen on the carbon atom of CO2 with a small activation energy. The final product state in the cluster model has bicarbonate bound by one short and one long metal to oxygen bond. Detailed mechanisms for the initial attack of OH- on CO2 and proton movement out to the free oxygen atom were studied by locating intermediates and transition states. Two mechanisms for rearrangement of bound bicarbonate to its most stable form are found to have low barriers. The first involves rocking of the bicarbonate from the initial intermediate. The second accomplishes this shift by a cyclic exchange of protons with a hydrogen-bound water or Thr-119. A Glu residue is hydrogen bonded to N(E2) of a tripod His in known carbonic anhydrase structures. Model calculations indicate the possibility of proton transfer to Glu simultaneous with the protonation of zinc-bound hydroxyl, which may explain observed NMR shifts of the histidine protons as a function of pH. Regardless of the proton position, the anionic residue qualitatively changes the electrostatic potentials in the active site region and the binding energies of other anionic ligands. The presence of the anionic residue is important in the release of product bicarbonate and also increases the exothermicity of the initial hydrolysis step. Binding of the CO2 substrate is essentially unaffected by the presence of the anionic residue and also by the deprotonation of the metal-bound water, explaining the lack of any dependence on the pH of the Michaelis-Menten parameter K(M). Available coordination sites were examined for clusters of zinc and three ammonias with two waters, hydroxyl and water, or thiocyanate anion and water. The proton affinity of bound hydroxyl was unaffected by an increase in the zinc coordination number. In the presence of an anionic ligand, water is energetically favored as a second-shell ligand hydrogen-bound to the anionic ligand rather than as a fifth ligand bound to the Zn cation. The thiocyanate structure agrees well with experiment.