Lipase from Pseudomonas cepacia (PCL) surprisingly favors acylation of the secondary hydroxyl at the 3'-position over the primary hydroxyl at the 5'-position in 2'-deoxynucleosides by up to >98:1. Catalytically productive tetrahedral intermediate analogues for both orientations were found by molecular modeling. However, acylation of the 3'-hydroxyl places the thymine base in the alternate hydrophobic pocket of PCL's substrate-binding site where it can hydrogen bond to the side-chain hydroxyls of Tyr23 and Tyr29 and the main chain carbonyl of Leu17. Conversely, acylation of the 5'-hydroxyl leaves the thymine base in the solvent where there is no favorable binding to the enzyme. We propose that these remote stabilizing interactions between the thymine base and PCL's substrate-binding site stabilize the 3'-acylation transition state and thus account for the unusual regioselectivity.