Semiempirical (AM1 and PM3) calculations on active site models have been performed to study the mechanism of horse liver alcohol dehydrogenase (HLADH). The active site model used in the calculations consists of a Zn(II) ion coordinated by derivatives of Cys 46, Cys 174, His 67 and an alkoxide/aldehyde, and also by derivatives of Ser 48 and NAD+/NADH. The theoretical calculations show drastic differences in ground state energy levels for model systems incorporating negatively charged cysteine residues compared with active site models based on neutral cysteine residues. The lower enzymatic activity of HLADH towards isopropanol can be rationalized using the active site models presented in this study. A negative charge on hydrogen being transferred in the transition state can be calculated, pointing to a hydride transfer mechanism. Probability calculations suggest that hydrogen tunnelling may occur. However, to draw definite conclusions one should take into account the dynamics of the enzyme system. In agreement with literature data, water most probably does not act as a fifth ligand of zinc in the ternary complex. It is not clear from the calculations whether water is involved in the proton relay mechanism or not.