Cezanne-2 (Cez2) is a deubiquitinylating (DUB) enzyme involved in the regulation of ubiquitin-driven cellular signaling and selectively targets Lys11-linked polyubiquitin chains. As a representative member of the ovarian tumor (OTU) subfamily DUBs, it performs cysteine proteolytic isopeptide bond cleavage; however, its exact catalytic mechanism is not yet resolved. In this work, we used different computational approaches to get molecular insights into the Cezanne-2 catalytic mechanism. Extensive molecular dynamics (MD) simulations were performed for 12 μs to model free Cez2 and the diubiquitin (diUb) substrate-bound protein-protein complex in two different charge states of Cez2, each corresponding to a distinct reactive state in its catalytic cycle. The simulations were analyzed in terms of the relevant structural parameters for productive enzymatic catalysis. Reactive diUb-Cez2 complex configurations were identified, which lead to isopeptide bond cleavage and stabilization of the tetrahedral oxyanion intermediate. The reliability of these complexes was further assessed by quantum mechanics/molecular mechanics (QM/MM) optimizations. The results show that Cez2 follows a modified cysteine protease mechanism involving a catalytic Cys210/His367 dyad, with the oxyanion hole to be a part of the "C-loop," and polarization of His367 by the formation of a strictly conserved water bridge with Glu173. The third residue has a dual role in catalysis as it mediates substrate binding and polarization of the catalytic dyad. A similar mechanism was identified for Cezanne-1, the paralogue of Cez2. In general, our simulations provide valuable molecular information that may help in the rational design of selective inhibitors of Cez2 and closely related enzymes.