Ab initio QM/MM free-energy simulations were carried out to study the peptide bond formation reaction in the peptidyl transferase center of the ribosome. The QM part of the reaction was treated by density functional theory at the B3LYP/6-31G* level, while the MM part including the solvent and RNA environment was described by molecular force field. The calculated free-energy surfaces for the two popular reaction mechanisms, the six- and eight-membered ring reactions, exhibited large energetic differences which favor the eight-membered reaction mechanism. The simulated quasi-transition state structures clearly indicated a "late" feature consistent with previous theoretical studies. Also the important functional role played by water molecules in the active site of the ribosome and its implication in ribozymic catalysis was discussed in detail.