Aldose reductase, an NADPH dependent oxidoreductase, has received considerable attention due to its possible link to diabetic and galactosemic complications. It is known that the catalytic reaction involves a hydride shift from NADPW and a proton transfer from a suitable proton donor to the carbonyl group of the substrate. However, the details of the process are still unclear. The present work explores the catalytic mechanism of the enzyme by using the semi-microscopic protein dipoles Langevin dipoles (PDLD/S) and the empirical valence bond (EVB) methods. The pK(a) values of His-110 and Tyr-48 are evaluated to determine which of these two residues donates the proton in the reaction. It is found that the free energy of protonation of His-110 in its protein site is similar to 9 kcal/mol and hence the pK(a) of this residue is abnormally low. Consequently, His-110 is not protonated in the active site of aldose reductase. On the other hand, it is found that the pK(a) of Tyr-48 is lowered to similar to 8.5 in the active site due to the stabilization by the unique local environment of the phenol group. We conclude that Tyr-48 acts as the proton donor in the reduction of aldehydes by aldose reductase, while the neutral His-110 has a role in substrate binding during the catalysis. To obtain a quantitative picture of the energetics of different feasible catalytic mechanisms in the protein we follow the EVE philosophy and calibrate the potential surface of the catalytic reaction in a solvent cage by using the relevant energetics from experiments. It is found that a mechanism where a proton transfer precedes the hydride transfer is unfavorable in the solvent cage, relative to the alternative mechanism where the hydride transfer precedes protonation. Furthermore, our study of the reaction in the actual protein environment indicates that an initial proton transfer step would require prohibitively high energy. Thus, the most probable catalytic mechanism commences with the hydride shift, followed by a proton transfer from Tyr-48. The calculations show that in water the activation barrier for the hydride shift is similar to 20 kcal/mol, which is far above the barrier of the subsequent proton transfer. The protein environment stabilizes the transition state of the hydride shift by similar to 3 kcal/mol and destabilizes the intermediate state by similar to 8 kcal/mol relative to the corresponding states in the water cage. This finding is consistent with the physiological role of the enzyme in detoxification where: it catalyzes the reduction of a wide range of carbonyl-containing substrates without particular specificity. It is argued that it may be difficult for an enzyme to both satisfy this demand and catalyze the reaction beyond the simple role of bringing the proton and hydride donor groups to the proximity of the substrate.