Multidomain carboxylic acid reductases (CARs) can reduce a wide range of carboxylic acids to the corresponding aldehydes in the presence of ATP and NADPH. Recent X-ray structures of the individual (di)domains of Segniliparus rugosus CAR (SrCAR) shed light on the catalysis mechanism and revealed domain dynamics during the different states of the reaction. However, the details of the catalytic mechanism of each step operated by the corresponding domains are still elusive. Toward this end, several models based on the crystal structures were constructed, and molecular dynamics simulations along with density functional theory (DFT) calculations were employed to elucidate the conformational dynamics and catalytic mechanism of SrCAR concealed to static crystallography. We investigated the roles of the key residues in the substrate binding pocket involved in the adenylation and thiolation reactions and especially determined the roles played by a nonconserved Lys528 residue in the thiolation step, which were further verified by site-directed mutagenesis. The reduction mechanism of SrCAR, including the natures of the transition states for hydride and proton transfer, was also explored theoretically using the DFT method B3LYP. The information presented here is useful as a guide for the future rational design of CARs.