The Golgi glycosyltransferase, N-acetylglucosaminyltransferase I (GnT-I), catalyzes the transfer of a GlcNAc residue from the donor UDP-GlcNAc to the C2-hydroxyl group of a mannose residue in the trimannosyl core of the Man(5)GlcNAc(2)-Asn-X oligosaccharide. The catalytic mechanism of GnT-I was investigated using a hybrid quantum mechanical/molecular mechanical (QM/MM) method with a QM part containing 88 atoms treated with density functional theory (DFT) at the BP/TZP level. The remaining parts of a GnT-I complex, altogether 5633 atoms, were modeled using the AMBER molecular force field. A theoretical model of a Michaelis complex was built using the X-ray structure of GnT-I in complex with the donor having geometrical features consistent with kinetic studies. The QM(DFT)/MM model identified a concerted S(N)2-type of transition state with D291 as the catalytic base for the reaction in the enzyme active site. The TS model features nearly simultaneous nucleophilic addition and dissociation steps accompanied by the transfer of the nucleophile proton H(b)2 to the catalytic base D291. The structure of the TS model is characterized by the O(b)2-C1 and C1-O1 bond distances of 1.912 and 2.542 A, respectively. The activation energy for the proposed reaction mechanism was estimated to be similar to 19 kcal mol(-1). The calculated alpha-deuterium kinetic isotope effect of 1.060 is consistent with the proposed reaction mechanism. Theoretical results also identified interactions between the H(b)6 and beta-phosphate oxygen of the UDP and a low-barrier hydrogen bond between the nucleophile and the catalytic base D291. It is proposed that these interactions contribute to a stabilization of TS. This modeling study provided detailed insight into the mechanism of the GlcNAc transfer catalyzed by GnT-I, which is the first step in the conversion of high mannose oligosaccharides to complex and hybrid N-glycan structures.