Using continuum electrostatics and QC/MM calculations, we investigate the catalytic cycle of the glycyl radical enzyme 4-hydroxyphenylacetate decarboxylase, an enzyme involved in the fermentative production of p-cresol from tyrosine in clostridia. On the basis of our calculations, we propose a five step mechanism for the reaction. In the first step, the substrate 4-hydroxyphenylacetate is activated by an unusual concerted abstraction of an electron and a proton. Namely, Cys503 radical abstracts an electron from the substrate and Glu637 abstracts a proton. Thus in total, a hydrogen atom is abstracted from the substrate. In the second step, the carboxylic group readily splits off from the phenoxy-acetate radical anion to give carbon dioxide. This decarboxylation step is coupled to a proton transfer from Glu637 back to the phenolic hydroxyl group which leads to a p-hydroxybenzyl radical. The remaining steps of the reaction involve a rotation of the Cys503 side chain followed by a proton transfer from Glu505 to Cys503 and a hydrogen atom transfer from Cys503 to the p-hydroxybenzyl radical to form p-cresol. The calculated mechanism agrees with experimental data suggesting that both Cys503 and Glu637 are essential for the catalytic function of 4-hydroxyphenylacetate decarboxylase and that the substrate requires a hydroxyl group in para-position to the acetate moiety.