Enzyme-catalyzed phosphoryl transfer reactions have frequently been suggested to proceed through transition states that are altered from their solution counterparts. Previous work with Escherichia Coll alkaline phosphatase (AP), however, suggests that this enzyme catalyzes the hydrolysis of phosphate monoesters through a loose, dissociative transition state, similar to that in solution. AP also exhibits catalytic promiscuity, with a low level of phosphodiesterase activity, despite the tighter, more associative transition state for phosphate diester hydrolysis in solution. Because AP is evolutionarily optimized for phosphate monoester hydrolysis, it is possible that the active site environment alters the transition state for diester hydrolysis to be looser in its bonding to the incoming and outgoing groups. To test this possibility, we have measured the nonenzymatic and AP-catalyzed rate of reaction for a series of substituted methyl phenyl phosphate diesters. The values of beta(Ig) and additional data suggest that the transition state for AP-catalyzed phosphate diester hydrolysis is indistinguishable from that in solution. Instead of altering transition state structure, AP catalyzes phosphoryl transfer reactions by recognizing and stabilizing transition states similar to those in aqueous solution. The AP active site therefore has the ability to recognize different transition states, a property that could assist in the evolutionary optimization of promiscuous activities.