GDP-mannose glycosyl hydrolase (GDPMH) catalyzes the hydrolysis of GDP-mannose and GDP-glucose to GDP and sugar by substitution with inversion at C1 of the sugar. The enzyme has a modified Nudix motif and requires one divalent cation for activity. The 1.3 A X-ray structure of the GDPMH-Mg(2+)-GDP complex, together with kinetic, mutational, and NMR data, suggests a mechanism for the GDPMH reaction. Several residues and the divalent cation strongly promote the departure of the GDP leaving group, supporting a dissociative mechanism. Comparison of the GDPMH structure with that of a typical Nudix hydrolase suggests how sequence changes result in the switch of catalytic activity from P-O bond cleavage to C-O bond cleavage. Changes in the Nudix motif result in loss of binding of at least one Mg(2+) ion, and shortening of a loop by 6 residues shifts the catalytic base by approximately 10 A.