The effect of organic solvents on horseradish peroxidase structure and function has been studied. Some, but not complete, enzyme denaturation occurs even in low volumes of water-miscible organic solvents (e.g., greater than 30% v/v dioxane, greater than 50% v/v methanol, and greater than 20% v/v acetonitrile) as determined by the decreased difference between the fluorescence of peroxidase's sole tryptophan residue and free L-tryptophan in solution. Absorbance and electron paramagnetic resonance spectroscopies indicate exposure of peroxidase's active site to the organic solvent. This reduces the local polarity in the enzyme's active site and results in stronger hydrogen bonding of phenolic substrates to the enzyme. In extreme cases (e.g., 95% v/v dioxane, 90% v/v acetonitrile, and ethyl and butyl acetate containing 2 and 1% v/v aqueous buffer, respectively), the transition state of the enzymic reaction is sufficiently perturbed so as to alter the magnitude of the Hammett rho value. This is most likely the result of the increased strength of hydrogen bonding between electron-donating alkoxyphenols (negative sigma values) and an electrophilic group in the enzyme's active site, thereby reducing catalytic efficiencies for such substrates relative to alkyl- and chlorophenols. Perhaps the most important effect of the organic solvent, however, is the significant ground-state stabilization of phenolic substrates in organic media as opposed to aqueous buffer. This stabilization can account for nearly 4 orders of magnitude in reduction of catalytic efficiency and is manifested in increased Km's. This study indicates that enzymes can maintain much of their native active-site structure in organic media and that the effect of solvent on substrate thermodynamics must be considered.