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Fumarate hydratase (FH) is a remarkable catalyst that decreases the free energy of the catalyzed reaction by 30 kcal mol-1, much larger than most exceptional enzymes with extraordinary catalytic rates. Two classes of FH are observed in nature: class-I and class-II, which have different folds, yet catalyze the same reversible hydration/dehydration reaction of the dicarboxylic acids fumarate/malate, with equal efficiencies. Using class-I FH from the hyperthermophilic archaeon Methanocaldococcus jannaschii (Mj) as a model along with comparative analysis with the only other available class-I FH structure from Leishmania major (Lm), we provide insights into the molecular mechanism of catalysis in this class of enzymes. The structure of MjFH apo-protein has been determined, revealing that large intersubunit rearrangements occur across apo- and holo-protein forms, with a largely preorganized active site for substrate binding. Site-directed mutagenesis of active site residues, kinetic analysis, and computational studies, including density functional theory (DFT) and natural population analysis, together show that residues interacting with the carboxylate group of the substrate play a pivotal role in catalysis. Our study establishes that an electrostatic network at the active site of class-I FH polarizes the substrate fumarate through interactions with its carboxylate groups, thereby permitting an easier addition of a water molecule across the olefinic bond. We propose a mechanism of catalysis in FH that occurs through transition-state stabilization involving the distortion of the electronic structure of the substrate olefinic bond mediated by the charge polarization of the bound substrate at the enzyme active site.