The first step in the reduction of arsenate to arsenite catalyzed by the enzyme arsenate reductase (ArsC) from Staphylococcus aureus plasmid pI258 involves the nucleophilic attack of a cysteine thiolate (Cys10) on the arsenic atom, leading to a covalent sulfur-arseno intermediate. We present a quantum chemical study on the onset of the nucleophilic displacement reaction. To optimize the reactant state geometry, a density functional study was performed on Cys10, on dianionic arsenate, and on the catalytic site sequence motif: X-X-Asn13-X-X-Arg16-Ser17. Both the hydrogen bond from Arg16 to the leaving hydroxyl group of arsenate and the hydrogen bonds from various backbone amide nitrogens of the catalytic site to the other oxygen atoms of arsenate are responsible for the increased electrophilicity of the central arsenic atom. In particular, Arg16 is identified as a residue that destabilizes the groundstate of the complex. Furthermore, the binding of dianionic arsenate to the enzyme induces negative charge transfer from the substrate to ArsC, which renders arsenic more receptive to nucleophilic attack. On the other hand, an a-helical macrodipole and a K+-Cys10 interaction network via Asn13 and Ser17 activate the nucleophile and stabilize the thiolate form of Cys10 by lowering its pK(a) to 6.7. By dissection of these interactions and performance of a reactivity analysis, the experimentally measured steady-state kinetic data and the function of crucial interactions observed in the X-ray structures of ArsC are illuminated.