L-arginine:glycine amidinotransferase (AT) catalyses the committed step in creatine biosynthesis by formation of guanidinoacetic acid, the immediate precursor of creatine. We have determined the crystal structure of the recombinant human enzyme by multiple isomorphous replacement at 1.9 A resolution. A telluromethionine derivative was used in sequence assignment. The structure of AT reveals a new fold with 5-fold pseudosymmetry of circularly arranged betabeta alphabeta-modules. These enclose the active site compartment, which is accessible only through a narrow channel. The overall structure resembles a basket with handles that are formed from insertions into the betabeta alphabeta-modules. Binding of L-ornithine, a product inhibitor, reveals a marked induced-fit mechanism, with a loop at the active site entrance changing its conformation accompanied by a shift of an alpha-helix by -4 A. Binding of the arginine educt to the inactive mutant C407A shows a similar mode of binding. A reaction mechanism with a catalytic triad Cys-His-Asp is proposed on the basis of substrate and product bound states.