Biosynthetic thiolase catalyzes the formation of acetoacetyl-CoA from two molecules of acetyl-CoA. This is a key step in the synthesis of many biological compounds, including steroid hormones and ketone bodies. The thiolase reaction involves two chemically distinct steps; during acyl transfer, an acetyl group is transferred from acetyl-CoA to Cys89, and in the Claisen condensation step, this acetyl group is further transferred to a second molecule of acetyl-CoA, generating acetoacetyl-CoA. Here, new crystallographic data for Zoogloea ramigera biosynthetic thiolase are presented, covering all intermediates of the thiolase catalytic cycle. The high-resolution structures indicate that the acetyl group goes through four conformations while being transferred from acetyl-CoA via the acetylated enzyme to acetoacetyl-CoA. This transfer is catalyzed in a rigid cavity lined by mostly hydrophobic side chains, in addition to the catalytic residues Cys89, His348, and Cys378. The structures highlight the importance of an oxyanion hole formed by a water molecule and His348 in stabilizing the negative charge on the thioester oxygen atom of acetyl-CoA at two different steps of the reaction cycle. Another oxyanion hole, composed of the main chain nitrogen atoms of Cys89 and Gly380, complements a negative charge of the thioester oxygen anion of the acetylated intermediate, stabilizing the tetrahedral transition state of the Claisen condensation step. The reactivity of the active site may be modulated by hydrogen bonding networks extending from the active site toward the back of the molecule.