Ceroid lipofuscinosis neuronal protein 5 (Cln5) is encoded by the CLN5 gene. The genetic variants of this gene are associated with the CLN5 form of Batten disease. Recently, the first crystal structure of Cln5 was reported. Cln5 shows cysteine palmitoyl thioesterase S-depalmitoylation activity, which was explored via fluorescent emission spectroscopy utilizing the fluorescent probe DDP-5. In this work, the mechanism of the reaction between Cln5 and DDP-5 was studied computationally by applying a QM/MM methodology at the ωB97X-D/6-31G(d,p):AMBER level. The results of our study clearly demonstrate the critical role of the catalytic triad Cys280-His166-Glu183 in S-depalmitoylation activity. This is evidenced through a comparison of the pathways catalyzed by the Cys280-His166-Glu183 triad and those with only Cys280 involved. The computed reaction barriers are in agreement with the catalytic efficiency. The calculated Gibb's free-energy profile suggests that S-depalmitoylation is a rate-limiting step compared to the preceding S-palmitoylation, with barriers of 26.1 and 25.3 kcal/mol, respectively. The energetics were complemented by monitoring the fluctuations in the electron density distribution through NBO charges and bond strength alterations via local mode stretching force constants during the catalytic pathways. This comprehensive protocol led to a more holistic picture of the reaction mechanism at the atomic level. It forms the foundation for future studies on the effects of gene mutations on both the S-palmitoylation and S-depalmitoylation steps, providing valuable data for the further development of enzyme replacement therapy, which is currently the only FDA-approved therapy for childhood neurodegenerative diseases, including Batten disease.