When Tyr245 in endocellulase Cel5A from Acidothermus cellulolyticus was changed to Gly (Y245G) by designed mutation, the value of K-i for inhibition of the enzyme by the product cellobiose was increased more than 1480%. This reduction in product inhibition enabled the mutant enzyme (used in conjunction with Trichoderma reesei cellobiohydrolase-I) to release soluble sugars from biomass cellulose at a rate as much as 40% greater than that achieved by the wild-type (WT) enzyme. The mutant was designed on the basis of the previously published crystal structure of the WT enzyme/ substrate complex (at a resolution of 2.4 angstrom), which provided insights into the enzyme mechanism at the atomic level and identified Tyr245 as a key residue interacting with a leaving group. To determine the origin of the change in activity, the crystal structure of Y245G was solved at 2.4-angstrom resolution to an R-factor of 0.19 (R-free = 0.25). To obtain additional information on the enzyme-product interactions, density functional calculations were performed on representative fragments of the WT Cel5A and Y245G. The combined results indicate that the loss of the platform (Y245G) and of a hydrogen bond (from a conformational change in Gln247) reduces the binding energy between product and enzyme by several kilo calories per mole. Both kinetic and structural analyses thus relate the increased enzymatic activity to reduced product inhibition.