Escherichia coli inorganic pyrophosphatase (E-PPase) is a tetranuclear divalent metal dependent enzyme that catalyzes the reversible interconversion of pyrophosphate (PPi) and orthophosphate (Pi), with Mg(2+) conferring the highest activity. In the present work, the reaction mechanism of E-PPase is investigated using the hybrid density functional theory (DFT) method B3LYP with a large model of the active site. Our calculated results shed further light on the detailed reaction mechanism. In particular, the important residue Asp67, either protonated or unprotonated, was taken into account in the present calculations. Our calculations indicated that a protonated Asp67 is crucial for the reverse reaction to take place; however, it is lost sight of in the forward reaction. The bridging hydroxide is shown to be capable of performing nucleophilic in-line attack on the substrate from its bridging position in the presence of four Mg(2+) ions. During the catalysis, the roles of the four magnesium ions are suggested to provide a necessary conformation of the active site, facilitate the nucleophile formation and substrate orientation, and stabilize the trigonal bipyramid transition state, thereby lowering the barrier for the nucleophilic attack.