The allosteric enzyme aspartate transcarbamoylase (ATCase) exists in two conformational states. The enzyme, in the absence of substrates is primarily in the low-activity T state, is converted to the high-activity R state upon substrate binding, and remains in the R state until substrates are exhausted. These conformational changes have made it difficult to obtain structural data on R-state active-site complexes. Here we report the R-state structure of ATCase with the substrate Asp and the substrate analog phosphonoactamide (PAM) bound. This R-state structure represents the stage in the catalytic mechanism immediately before the formation of the covalent bond between the nitrogen of the amino group of Asp and the carbonyl carbon of carbamoyl phosphate. The binding mode of the PAM is similar to the binding mode of the phosphonate moiety of N-(phosphonoacetyl)-l-aspartate (PALA), the carboxylates of Asp interact with the same residues that interact with the carboxylates of PALA, although the position and orientations are shifted. The amino group of Asp is 2.9 A away from the carbonyl oxygen of PAM, positioned correctly for the nucleophilic attack. Arg105 and Leu267 in the catalytic chain interact with PAM and Asp and help to position the substrates correctly for catalysis. This structure fills a key gap in the structural determination of each of the steps in the catalytic cycle. By combining these data with previously determined structures we can now visualize the allosteric transition through detailed atomic motions that underlie the molecular mechanism.