Most of the cellular ATP in living organisms is synthesized by the enzyme F(1)F(o)-ATP synthase. The water soluble F(1) part of the enzyme can also work in reverse and utilize the chemical energy released during ATP hydrolysis to generate mechanical motion. Despite the availability of a large amount of biochemical data and several x-ray crystallographic structures of F(1), there still remains a considerable lack of understanding as to how this protein efficiently converts the chemical energy released during the reaction ATP + H(2)O --> ADP + P(i) into mechanical motion of the stalk. We report here an ab initio QM/MM study of ATP hydrolysis in the beta(TP) catalytic site of F(1). Our simulations provide an atomic level description of the reaction path, its energetics, and the interaction of the nucleotide with the protein environment during catalysis. The simulations suggest that the reaction path with the lowest potential energy barrier proceeds via nucleophilic attack on the gamma-phosphate involving two water molecules. Furthermore, the ATP hydrolysis reaction in beta(TP) is found to be endothermic, demonstrating that the catalytic site is able to support the synthesis of ATP and does not promote ATP hydrolysis in the particular conformation studied.