Yeast cytosine deaminase (yCD) catalyzes the hydrolytic deamination of cytosine to uracil as well as the deamination of the prodrug 5-fluorocytosine (5FC) to the anticancer drug 5-fluorouracil. In this study, the role of Glu64 in the activation of the prodrug 5FC was investigated by site-directed mutagenesis, biochemical, nuclear magnetic resonance (NMR), and computational studies. Steady-state kinetics studies showed that the mutation of Glu64 causes a dramatic decrease in k cat and a dramatic increase in K m, indicating Glu64 is important for both binding and catalysis in the activation of 5FC. 19F NMR experiments showed that binding of the inhibitor 5-fluoro-1H-pyrimidin-2-one (5FPy) to the wild-type yCD causes an upfield shift, indicating that the bound inhibitor is in the hydrated form, mimicking the transition state or the tetrahedral intermediate in the activation of 5FC. However, binding of 5FPy to the E64A mutant enzyme causes a downfield shift, indicating that the bound 5FPy remains in an unhydrated form in the complex with the mutant enzyme. 1H and 15N NMR analysis revealed trans-hydrogen bond D/H isotope effects on the hydrogen of the amide of Glu64, indicating that the carboxylate of Glu64 forms two hydrogen bonds with the hydrated 5FPy. ONIOM calculations showed that the wild-type yCD complex with the hydrated form of the inhibitor 1Hpyrimidin- 2-one is more stable than the initial binding complex, and in contrast, with the E64A mutant enzyme, the hydrated inhibitor is no longer favored and the conversion has a higher activation energy, as well. The hydrated inhibitor is stabilized in the wild-type yCD by two hydrogen bonds between it and the carboxylate of Glu64 as revealed by 1H and 15N NMR analysis. To explore the functional role of Glu64 in catalysis, we investigated the deamination of cytosine catalyzed by the E64A mutant by ONIOM calculations. The results showed that without the assistance of Glu64, both proton transfers before and after the formation of the tetrahedral reaction intermediate become partially rate-limiting steps. The results of the experimental and computational studies together indicate that Glu64 plays a critical role in both the binding and the chemical transformation in the conversion of the prodrug 5FC to the anticancer drug 5-fluorouracil.