Acetylcholinesterase (AChE) is a remarkably efficient serine hydrolase responsible for the termination of impulse signaling at cholinergic synapses. By employing Born-Oppenheimer molecular dynamics simulations with a B3LYP/6-31G(d) QM/MM potential and the umbrella sampling method, we have characterized its complete catalytic reaction mechanism for hydrolyzing neurotransmitter acetylcholine (ACh) and determined its multistep free-energy reaction profiles for the first time. In both acylation and deacylation reaction stages, the first step involves the nucleophilic attack on the carbonyl carbon, with the triad His447 serving as the general base, and leads to a tetrahedral covalent intermediate stabilized by the oxyanion hole. From the intermediate to the product, the orientation of the His447 ring needs to be adjusted very slightly, and then, the proton transfers from His447 to the product, and the break of the scissile bond happens spontaneously. For the three-pronged oxyanion hole, it only makes two hydrogen bonds with the carbonyl oxygen at either the initial reactant or the final product state, but the third hydrogen bond is formed and stable at all transition and intermediate states during the catalytic process. At the intermediate state of the acylation reaction, a short and low-barrier hydrogen bond (LBHB) is found to be formed between two catalytic triad residues His447 and Glu334, and the spontaneous proton transfer between two residues has been observed. However, it is only about 1-2 kcal/mol stronger than the normal hydrogen bond. In comparison with previous theoretical investigations of the AChE catalytic mechanism, our current study clearly demonstrates the power and advantages of employing Born-Oppenheimer ab initio QM/MM MD simulations in characterizing enzyme reaction mechanisms.