The hydride transfer reaction between formate and NAD(+) has been investigated by using molecular orbital theory in combination with continuum solvation models. The reaction in the gas phase is extremely exothermic due to the instability of the charged reactant species. The calculations reveal that during the hydride transfer the pyridine ring of NAD(+) takes a quasi-boat conformation. The nitrogen atom of the pyridine ring remains planar, which is in agreement with the experimentally established N-15 kinetic isotope effect (1.004 +/- 0.001) of the formate dehydrogenase catalyzed oxidation of formate to carbon dioxide. The computed value at the HF/6-31+G(d,p) level of theory for the N-15 kinetic isotope effect is 1.0042. In solution, however, there is a potential energy barrier for the hydride transfer. At the MP2/6-31G(d)//HF/6-31G(d) level of theory the self-consistent reaction field approach gives a barrier height of 9.0 kcal/mol in acetonitrile (epsilon = 35.9). Direct nucleophilic addition of one of the carboxylate oxygens of formate to the pyridine ring of NAD(+) competes with hydride transfer, and this study reveals that this nucleophilic addition is likely to be preferred over the hydride transfer in the gas phase. Thus, the NAD(+)-dependent formate dehydrogenase must orient the substrate formate in the active site in such a fashion as to prevent this competing reaction from occurring. According to the recently solved X-ray crystal structure, it is clear that the Arg-284 and Asn-146 are the two critical amino acid residues that hold formate in the productive orientation for hydride transfer.