The molecular structure of alanine racemase from Bacillus stearothermophilus was determined by X-ray crystallography to a resolution of 1.9 A. The alanine racemase monomer is composed of two domains, an eight-stranded alpha/beta barrel at the N-terminus, which includes residues 1-240, and a C-terminal domain essentially composed of beta-strand (residues 241-388). In the structure of the dimer the mouth of the alpha/beta barrel of one monomer faces the second domain of the other monomer. The pyridoxal 5'-phosphate (PLP) cofactor lies in and above the mouth of the alpha/beta barrel and is covalently linked via an aldimine linkage to Lys39, which is at the C-terminus of the first beta-strand of the alpha/beta barrel. This is the first example of a PLP cofactor binding in the active site of a alpha/beta barrel. A number of other residues are involved in maintaining the position of the PLP in the protein. Of these, Arg219 is the most interesting, as it forms a hydrogen bond with the pyridine nitrogen of the cofactor. This is the first known occurrence of such an interaction with PLP and is expected to influence the electron delocalization in the PLP-alanine intermediates. A second arginine residue, Arg136, donates a hydrogen bond to the phenolic oxygen of PLP and may be involved in the binding of substrate as well as stabilization of intermediates. Finally, Tyr265', from the second monomer, is postulated to be 2 proton donor to the carbanion intermediate.