The structures of thymidylate synthase (TS) from Escherichia coli, in ternary complexes with substrate and an analogue of the cofactor, are the basis of a stereochemical model for a key reaction intermediate in the catalyzed reaction. This model is used to compare the reaction chemistry and chirality of the transferred methyl group with structures of the components, to identify those residues that participate, and to propose a stereochemical mechanism for catalysis by TS. Effects of chemical modification of specific amino acid residues and site-directed mutations of residues are correlated with structure and effects on enzyme mechanism. The ordered binding sequence of substrate deoxyuridine monophosphate and methylenetetrahydrofolate can be understood from the structure, where each forms a large part of the binding site for the other. The catalytic site serves to orient the reactants, which are sequestered along with many water molecules within a cavernous active center. Conformational changes during the reaction could involve nearby residues in ways that are not obvious in this complex.