Two new inhibitors in which the terminal α-carboxyl groups of Z-Ala-Ala-Phe-COOH and Z-Ala-Pro-Phe-COOH have been replaced with a proton to give Z-Ala-Ala-Phe-H and Z-Ala-Pro-Phe-H, respectively, have been synthesized. Using these inhibitors, we estimate that for α-chymotrypsin and subtilisin Carlsberg the terminal carboxylate group decreases the level of inhibitor binding 3-4-fold while a glyoxal group increases the level of binding by 500-2000-fold. We show that at pH 7.2 the effective molarities of the catalytic hydroxyl group of the active site serine are 41000-229000 and 101000-159000 for α-chymotrypsin and subtilisin Carlsberg, respectively. It is estimated that oxyanion stabilization and the increased effective molarity of the catalytic serine hydroxyl group can account for the catalytic efficiency of the reaction. We argue that substrate binding induces the formation of a strong hydrogen bond or low-barrier hydrogen bond between histidine-57 and aspartate-102 that increases the pK(a) of the active site histidine, allowing it to be an effective general base catalyst for the formation of the tetrahedral intermediate and increasing the effective molarity of the catalytic hydroxyl group of serine-195. A catalytic mechanism for acyl intermediate formation in the serine proteases is proposed.