F(1)F(o)-ATP synthase is the enzyme responsible for most of the ATP synthesis in living systems. The catalytic domain F(1) of the F(1)F(o) complex, F(1)-ATPase, has the ability to hydrolyze ATP. A fundamental problem in the development of a detailed mechanism for this enzyme is that it has not been possible to determine experimentally the relation between the ligand binding affinities measured in solution and the different conformations of the catalytic beta subunits (beta(TP), beta(DP), beta(E)) observed in the crystal structures of the mitochondrial enzyme, MF(1). Using free energy difference simulations for the hydrolysis reaction ATP+H(2)O --> ADP+P(i) in the beta(TP) and beta(DP) sites and unisite hydrolysis data, we are able to identify beta(TP) as the "tight" (K(D) = 10(-12) M, MF(1)) binding site for ATP and beta(DP) as the "loose" site. An energy decomposition analysis demonstrates how certain residues, some of which have been shown to be important in catalysis, modulate the free energy of the hydrolysis reaction in the beta(TP) and beta(DP) sites, even though their structures are very similar. Combined with the recently published simulations of the rotation cycle of F(1)-ATPase, the present results make possible a consistent description of the binding change mechanism of F(1)-ATPase at an atomic level of detail.