Deubiquitinating enzymes (DUBs) catalyze the cleavage of the isopeptide bond in polyubiquitin chains to control and regulate the deubiquitination process in all known eukaryotic cells. The human AMSH-LP DUB domain specifically cleaves the isopeptide bonds in the Lys63-linked polyubiquitin chains. In this article, the catalytic mechanism of AMSH-LP has been studied using a combined quantum mechanics and molecular mechanics method. Two possible hydrolysis processes (Path 1 and Path 2) have been considered. Our calculation results reveal that the activation of Zn(2+)-coordinated water molecule is the essential step for the hydrolysis of isopeptide bond. In Path 1, the generated hydroxyl first attacks the carbonyl group of Gly76, and then the amino group of Lys63 is protonated, which is calculated to be the rate limiting step with an energy barrier of 13.1 kcal/mol. The energy barrier of the rate limiting step and the structures of intermediate and product are in agreement with the experimental results. In Path 2, the protonation of amino group of Lys63 is prior to the nucleophilic attack of activated hydroxyl. The two proton transfer processes in Path 2 correspond to comparable overall barriers (33.4 and 36.1 kcal/mol), which are very high for an enzymatic reaction. Thus, Path 2 can be ruled out. During the reaction, Glu292 acts as a proton transfer mediator, and Ser357 mainly plays a role in stabilizing the negative charge of Gly76. Besides acting as a Lewis acid, Zn(2+) also influences the reaction by coordinating to the reaction substrates (W1 and Gly76).