Crystal structures of the enzyme creatine amidinohydrolase (creatinase, EC 126.96.36.199) with two different inhibitors, the reaction product sarcosine and the substrate creatine, bound have been analyzed by X-ray diffraction methods. With the inhibitor carbamoyl sarcosine, two different crystal forms at different pH values have been determined. An enzymatic mechanism is proposed on the basis of the eight structures analyzed. The enzyme binds substrate and inhibitor in a distorted geometry where the urea resonance is broken. His232 is the general base and acid, and acts as a proton shuttle. It withdraws a proton from water 377 and donates it to the N(3) atom of the guanidinium group. OH- 377 adds to the C(1) atom of the guanidinium group to form a urea hydrate. Proton withdrawal by His232 leads to products. The reaction product sarcosine binds to the active site in a reverse orientation. The free enzyme was found to have a bicarbonate bound to the active site.