Glutamate racemase (Mud, RacE; E.C.5.1.1.3) catalyses the cofactorindependent conversion of L-glutamate to D-glutamate, an essential step in the synthesis of components of the bacterial cell wall. The 1.75 A crystal structure of a binary complex of Bacillus sub/iUs RacE with its substrate D-Glu has been solved using multiwavelength anomalous dispersion exploiting the anomalous signal of seleno-methionine substituted RacE protein. The B. sub/iUs RacE subunit consists of a single polypeptide chain of 272 residues composed of ten p-strands, ten a-helices and a number of loops, which together fold into 2 domains that enclose a deep pocket, the active site, in which the glutamate moiety is almost completely buried and whose binding involves a large-scale conformational rearrangement. The structure of RacE reveals tha~ its two domains are related by a pseudo 2-fold rotation which superimposes the two catalytic cysteine residues which are located at spatially equivalent positions on either side of the Ct.-carbon of the substrate from which a proton is transferred during catalysis. The structure of the complex is quite different from that proposed on the basis of earlier crystallographic studies and has provided significant new insights into the mechanism of RacE and accompanied conformational changes together with a clear explanation for the potency of a family of RacE inhibitors which have been developed as novel antibacterial agents. Finally, key residues on the surface of RacE that might be important in the acquisition of drug resistance by bacteria have been highlighted by modelling studies on the mode of inhibitor binding.