Methylmalonate-semialdehyde dehydrogenase (MSDH) belongs to the CoA-dependent aldehyde dehydrogenase subfamily. It catalyzes the NAD-dependent oxidation of methylmalonate semialdehyde (MMSA) to propionyl-CoA via the acylation and deacylation steps. MSDH is the only member of the aldehyde dehydrogenase superfamily that catalyzes a β-decarboxylation process in the deacylation step. Recently, we demonstrated that the β-decarboxylation is rate-limiting and occurs before CoA attack on the thiopropionyl enzyme intermediate. Thus, this prevented determination of the transthioesterification kinetic parameters. Here, we have addressed two key aspects of the mechanism as follows: 1) the molecular basis for recognition of the carboxylate of MMSA; and 2) how CoA binding modulates its reactivity. We substituted two invariant arginines, Arg-124 and Arg-301, by Leu. The second-order rate constant for the acylation step for both mutants was decreased by at least 50-fold, indicating that both arginines are essential for efficient MMSA binding through interactions with the carboxylate group. To gain insight into the transthioesterification, we substituted MMSA with propionaldehyde, as both substrates lead to the same thiopropionyl enzyme intermediate. This allowed us to show the following: 1) the pK(app) of CoA decreases by ∼3 units upon binding to MSDH in the deacylation step; and 2) the catalytic efficiency of the transthioesterification is increased by at least 10(4)-fold relative to a chemical model. Moreover, we observed binding of CoA to the acylation complex, supporting a CoA-binding site distinct from that of NAD(H).