The catalytic mechanism of cyclodextrin glycosyltransferase, a member of the a-amylase family, is reviewed. The focus is put on the bond cleavage mechanism, the nature of the transition state and of the covalent intermediate, and on the stereo-electronic and lateral protonation contributions to catalysis. The functions in catalysis of the absolutely conserved residues in this family are discussed. Finally, the fascinating capability of cyclodextrin glycosyltransferase to produce cyclodextrins from linear starch oligosaccharide chains is reviewed, together with protein engineering studies to modify the enzyme's product specificity.