The unusually strong reversible binding of biotin by avidin and streptavidin has been investigated by density functional and MP2 ab initio quantum mechanical methods. The solvation of biotin by water has also been studied through QM/MM/MC calculations. The ureido moiety of biotin in the bound state hydrogen bonds to five residues, three to the carbonyl oxygen and one for each--NH group. These five hydrogen bonds act cooperatively, leading to stabilization that is larger than the sum of individual hydrogen-bonding energies. The charged aspartate is the key residue that provides the driving force for cooperativity in the hydrogen-bonding network for both avidin and streptavidin by greatly polarizing the urea of biotin. If the residue is removed, the network is disrupted, and the attenuation of the energetic contributions from the neighboring residues results in significant reduction of cooperative interactions. Aspartate is directly hydrogen-bonded with biotin in streptavidin and is one residue removed in avidin. The hydrogen-bonding groups in streptavidin are computed to give larger cooperative hydrogen-bonding effects than avidin. However, the net gain in electrostatic binding energy is predicted to favor the avidin-bicyclic urea complex due to the relatively large penalty for desolvation of the streptavidin binding site (specifically expulsion of bound water molecules). QM/MM/MC calculations involving biotin and the ureido moiety in aqueous solution, featuring PDDG/PM3, show that water interactions with the bicyclic urea are much weaker than (strept)avidin interactions due to relatively low polarization of the urea group in water.