We have solved the structure of two active-site variants of soluble inorganic pyrophosphatases (PPase), R78K and D117K, at resolutions of 1.85 and 2.15 Å and R-factors of 19.5% and 18.3%, respectively.In the R78K variant structure, the high-affinity phosphate group (P1) is missing, consistent with the wild-type structure showing a bidentate interaction between P1 and Arg78, and solution data showing a decrease in P1 affinity in the variant. The structure explains why the mutation affects P1 and pyrophosphate binding much more than would be expected by the loss of one hydrogen bond: Lys78 forms an ion-pair with Asp71, precluding an interaction with P1. The R78K variant also provides the first direct evidence that the low-affinity phosphate group (P2) can adopt the structure that we believe is the immediate product of hydrolysis, with one of the P2 oxygen atoms co-ordinated to both activating metal ions (M1 and M2). If so, the water molecule (Wat1) between M1 and M2 in wild-type PPase is, indeed, the attacking nucleophile.The D117E variant structure likewise supports our model of catalysis, as the Glu117 variant carboxylate group is positioned where Wat1 is in the wild-type: the potent Wat1 nucleophile is replaced by a carboxylate co-ordinated to two metal ions. Alternative confirmations of Glu117 may allow Wat1 to be present but at much reduced occupancy, explaining why the pKa of the nucleophile increases by three pH units, even though there is relatively little distortion of the active site.These new structures, together with parallel functional studies measuring catalytic efficiency and ligand (metal ion, PPi and Pi) binding, provide strong evidence against a proposed mechanism in which Wat1 is considered unimportant for hydrolysis. They thus support the notion that PPase shares mechanistic similarity with the “two-metal ion” mechanism of polymerases.