We have used directly combined high-performance liquid chromatography-mass spectrometry (LC/MS) to examine the mechanism of the reaction catalyzed by the double-stranded RNA unwinding/modifying activity [Bass & Weintraub (1988) Cell 55, 1089-1098]. A double-stranded RNA substrate in which all adenosines were uniformly labeled with 13C was synthesized. An LC/MS analysis of the nucleoside products from the modified, labeled substrate confirmed that adenosine is modified to inosine during the unwinding/modifying reaction. Most importantly, we found that no carbons are exchanged during the reaction. By including H2(18)O in the reaction, we showed that water serves efficiently as the oxygen donor in vitro. These results are consistent with a hydrolytic deamination mechanism and rule out a base replacement mechanism. Although the double-stranded RNA unwinding/modifying activity appears to utilize a catalytic mechanism similar to that of adenosine deaminase, coformycin, a transition-state analogue, will not inhibit the unwinding/modifying activity.