Ab initio molecular orbital and combined QM/MM Monte Carlo simulations have been carried out to investigate the origin of the unusually high acidity of Meldrum's acid. Traditionally, the high acidity of Meldrum's acid relative to that of methyl malonate has been attributed to an additive effect due to the presence of two E esters in the dilactone system. However, the present study reveals that there is significant nonadditive effect that also makes major contributions. This results from preferential stabilization of the enolate anion over that of Meldrum's acid due to anomeric stereoelectronic interactions. To investigate solvent effects on the acidity in aqueous solution, the relative acidities of Z and E conformers of methyl acetate have been determined in combined ab initio QM/MM simulations. There is significant solvent effect on the conformational equilibria for both the neutral ester and its enolate anion in water, leading to stabilization of the E stereoisomer. However, the computed solvent effect of 4.4 kcal/mol in favor of the E isomer of methyl acetate is largely offset by the favorable solvation of 3.4 kcal/mol for the E conformer of the enolate anion. This leads to an enhanced acidity of 3.4 kcal/mol for the (E)-methyl acetate in water over the Z conformer. In Meldrum's acid, it is the preferential stabilization of the enolate anion due to anomeric effects coupled with the intrinsically higher acidity of the E conformation of ester that is responsible for its high acidity.