A neutron structure analysis at 2.2-A resolution has been performed on bovine trypsin covalently inhibited by a transition-state analogue, the monoisopropylphosphoryl (MIP) group. The unique ability of neutron diffraction to locate hydrogen atoms experimentally has allowed the determination of the protonation states of the catalytic site residues (Asp-102 and His-57). Since the bound MIP group mimics the tetrahedral intermediate structure, these correspond to the protonation states at the most crucial step of the hydrolysis. This has resolved a much debated mechanistic issue by showing conclusively that the catalytic base in the transition state of the reaction is His-57, not Asp-102. This finding has important implications for the understanding of the hydrolysis mechanism of the serine proteases. A detailed examination of the stereochemical interaction among the catalytic groups was also conducted to identify their individual roles in the mechanism. Besides functioning as the catalytic group, it was found that His-57 could effectively "steer" the attacking water toward the acyl group during deacylation. Other aspects of protein structure which are observable only by neutron diffraction analysis are also discussed. These include orientation of well-ordered amide side chains, which is made possible by the large scattering difference between nitrogen and oxygen atoms, location and orientation of water molecules, and hydrogen exchange properties of the protein.