To study the flexibility of the substrate-binding site and in particular of Gln262, we have performed adiabatic conformational search and molecular dynamics simulations on the crystal structure of the catalytic domain of wild-type protein-tyrosine phosphatase (PTP) 1B, a mutant PTP1B(R47V,D48N,M258C,G259Q), and a model of the catalytically active form of PTPalpha. For each molecule two cases were modeled: the Michaelis-Menten complex with the substrate analogue p-nitrophenyl phosphate (p-PNPP) bound to the active site and the cysteine-phosphor complex, each corresponding to the first and second step of the phosphate hydrolysis. Analyses of the trajectories revealed that in the cysteine-phosphor complex of PTP1B, Gln262 oscillates freely between the bound phosphate group and Gly259 frequently forming, as observed in the crystal structure, a hydrogen bond with the backbone oxygen of Gly259. In contrast, the movement of Gln262 is restricted in PTPalpha and the mutant due to interactions with Gln259 reducing the frequency of the oscillation of Gln262 and thereby delaying the positioning of this residue for the second step in the catalysis, as reflected experimentally by a reduction in k(cat). Additionally, in the simulation with the Michaelis-Menten complexes, we found that a glutamine in position 259 induces steric hindrance by pushing the Gln262 side chain further toward the substrate and thereby negatively affecting K(m) as indicated by kinetic studies. Detailed analysis of the water structure around Gln262 and the active site Cys215 reveals that the probability of finding a water molecule correctly positioned for catalysis is much larger in PTP1B than in PTP1B(R47V,D48N,M258C,G259Q) and PTPalpha, in accordance with experiments.