Molecular dynamics (MD) simulations have been performed on the regulatory domain of the Escherichia coli OxyR transcription factor for the different chemical states along the mechanistic cycle for its activation by hydrogen peroxide. Conformational analysis indicates that His198 and Arg220 catalytic residues can be involved in the biochemical process of activation of OxyR. On the basis of the simulation data, a detailed mechanism for the oxidation process is suggested in which His198, in the presence of an arginine residue, functions as a unique acid-base catalyst in the successive oxidations of Cys199 and Cys208 by hydrogen peroxide. This mechanistic proposal has been tested by density functional theory (DFT-B3LYP) and ab initio (MP2) calculations on model systems. The two oxidations are both identified as nucleophilic substitution reactions of SN2 type with deprotonated cysteines functioning as nucleophiles. Both reactions have a calculated free energy of activation close to 15 kcal mol-1, which is consistent with the available experimental data on the kinetics of the activation process.