Molecular mechanics calculations of adenylate kinase (ADK) complexed with ATP, AMP, and Mg^2+ have been carried out with three different model-built geometries. The lowest energy structure is that inferred from the X-ray structure, but such a geometry is not as consistent with the inference of an NOE contact between His36 and the ATP C2-H proton as the model of the second lowest energy. We have used the latter structure as a basis for modeling the reaction AMP + ATP ↔ 2ADP in the presence of Mg^2+ and ADK. The key residues in the enzyme that stabilize the intermediate points in the above reaction are Arg44 and Arg97. This is the first clear picture of how an enzyme can catalyse a reaction which is electrostatically unfavorable.