The sortase A enzyme, which catalyzes the peptidoglycan cell wall anchoring reaction of LPXTG surface proteins, has been proposed to be a universal target for therapeutic agents against Gram-positive bacteria. The catalytic mechanism of the Staphylococcus aureus sortase A enzyme has been systematically studied using molecular dynamics simulations, ONIOM(DFT:MM) calculations, and QM/MM charge deletion analysis. The catalytic roles of Arg197 and Thr183 were analyzed. Our calculations show that Arg197 has several important roles in the mechanism. It is crucial for substrate binding, and is capable of reversible shift of its hydrogen bonds between the LP and TG carbonyls of the LPXTG substrate motif, depending on the protonation state of the catalytic Cys184-His120 dyad. Arg197 stabilizes the catalytic dyad in the active ion pair form but at the same time raises the barrier to acylation by approximately 8 kcal/mol. Thr183 is also essential for the catalytic reaction in that it correspondingly lowers the barrier by the same amount via electrostatic interactions. The catalytic mechanism proceeds via proton transfer from His120, followed by nucleophilic attack from the thiolate anion of Cys184. The data thus supports the proposed reverse protonation mechanism, and disproves the hypothesis of the Arg197 generating an oxyanion hole to stabilize the tetrahedral intermediate of the reaction.