Hydroxycinnamoyl-CoA hydratase-lyase (HCHL), a particular member of the crotonase superfamily, catalyzes the bioconversion of feruloyl-CoA to the important flavor and fragrance compound vanillin. In this article, the catalytic mechanism of HCHL has been studied by using hybrid density functional theory method with simplified models. The calculated results reveal that the mechanism involves the hydration of the CC double bond of feruloyl-CoA and thence the cleavage of CC single bond of β-hydroxythioester. The hydration step is a typical concerted process, whereas CC bond cleavage follows a concerted but asynchronous mechanism. The calculated energy barrier of hydration reaction is only slightly lower than that of cleavage process, implying both of two processes are rate limiting. By using three substrate analogs, the substrate specificity of HCHL was further examined. It is found that the p-hydroxyl group of aromatic ring is necessary for the catalytic reaction. © 2013 Wiley Periodicals, Inc.