Enolase-phosphatase E1 (MASA) is a bifunctional enzyme in the ubiquitous methionine salvage pathway that catalyzes the continuous reactions of 2,3-diketo-5-methylthio-1-phosphopentane to yield the aci-reductone metabolite using Mg2+ as cofactor. In this study, we have determined the crystal structure of MASA and its complex with a substrate analog to 1.7A resolution by multi-wavelength anomalous diffraction and molecular replacement techniques, respectively. The structures support the proposed mechanism of phosphatase activity and further suggest the probable mechanism of enolization. We establish a model for substrate binding to describe in detail the enzymatic reaction and the formation of the transition state, which will provide insight into the reaction mechanisms of other enzymes in the same family.