The diastereoisomers of adenosine 5'-O-phosphorothioate O-methyl ester have been synthesised. Only the Sp diastereoisomer is a substrate for the 5'-nucleotide phosphodiesterase from bovine intestinal mucosa. The previously unidentified enantiomer of 4-nitrophenyl phenyl phosphonothioate hydrolysed by the enzyme is shown to have the Sp configuration. Digestion of the Sp diastereoisomer of adenosine 5'-O-phosphorothioate O-methyl ester by the enzyme in 18O-labelled water gave 18O-labelled adenosine 5'-O-phosphorothioate which was stereochemically analysed by methylation and subsequent 31P-NMR spectroscopy and shown to possess the Sp configuration. Thus the enzyme-catalysed cleavage proceeded with retention of configuration at phosphorus, presumably via a double-displacement mechanism. This provides strong evidence for the existence of a nucleotidyl-enzyme intermediate on the reaction pathway.