First-principles quantum mechanical/molecular mechanical (QM/MM)-free energy calculations have been performed to uncover how uricase catalyzes metabolic reactions of uric acid (UA), demonstrating that the entire reaction process of UA in uricase consists of two stages–oxidation followed by hydration. The oxidation consists of four steps: (1) chemical transformation from 8-hydroxyxythine to an anionic radical via a proton transfer along with an electron transfer, which is different from the previously proposed electron-transfer mechanism that involves a dianion intermediate (UA2−) during the catalytic reaction process; (2) proton transfer to the O2− anion (radical); (3) diradical recombination to form a peroxo intermediate; (4) dissociation of H2O2 to generate the dehydrourate. Hydration, for the most favorable pathway, is initiated by the nucleophilic attack of a water molecule on dehydrourate, along with a concerted proton transfer through residue Thr69 in the catalytic site. According to the calculated free energy profile, the hydration is the rate-determining step, and the corresponding free energy barrier of 16.2 kcal/mol is consistent with that derived from experimental kinetic data, suggesting that the computational insights into the catalytic mechanisms are reasonable. The mechanistic insights not only provide a mechanistic base for future rational design of uricase mutants with improved catalytic activity against uric acid as an improved enzyme therapy, but also are valuable for understanding a variety of other cofactor-free oxidase-catalyzed reactions involving an oxygen molecule.