Tyrosyl-DNA phosphodiesterase I (Tdp1) is a member of the phospholipase D superfamily that hydrolyzes 3′-phospho-DNA adducts via two conserved catalytic histidines-one acting as the lead nucleophile and the second acting as a general acid/base. Substitution of the second histidine specifically to arginine contributes to the neurodegenerative disease spinocerebellar ataxia with axonal neuropathy (SCAN1). We investigated the catalytic role of this histidine in the yeast protein (His432) using a combination of X-ray crystallography, biochemistry, yeast genetics, and theoretical chemistry. The structures of wild-type Tdp1 and His432Arg both show a phosphorylated form of the nucleophilic histidine that is not observed in the structure of His432Asn. The phosphohistidine is stabilized in the His432Arg structure by the guanidinium group that also restricts the access of nucleophilic water molecule to the Tdp1-DNA intermediate. Biochemical analyses confirm that His432Arg forms an observable and unique Tdp1-DNA adduct during catalysis. Substitution of His432 by Lys does not affect catalytic activity or yeast phenotype, but substitutions with Asn, Gln, Leu, Ala, Ser, and Thr all result in severely compromised enzymes and DNA topoisomerase I-camptothecin dependent lethality. Surprisingly, His432Asn did not show a stable covalent Tdp1-DNA intermediate that suggests another catalytic defect. Theoretical calculations revealed that the defect resides in the nucleophilic histidine and that the pKa of this histidine is crucially dependent on the second histidine and on the incoming phosphate of the substrate. This represents a unique example of substrate-activated catalysis that applies to the entire phospholipase D superfamily. © 2011 Elsevier Ltd. All rights reserved.