<div>Retaining glycoside hydrolases cleave their substrates through stereochemical retention at the anomeric position. Typically, this involves two-step mechanisms using either an enzymatic nucleophile via a covalent glycosyl enzyme intermediate, or neighboring group participation by a substrate-borne 2-acetamido neighboring group via an oxazoline intermediate; no enzymatic mechanism with participation of the sugar 2-hydroxyl has been reported. Here, we detail structural, computational and kinetic evidence for neighboring group participation by a mannose 2-hydroxyl in glycoside hydrolase family 99 endo-α-1,2-mannanases. We present a series of crystallographic snapshots of key species along the reaction coordinate: a Michaelis complex with a tetrasaccharide substrate; complexes with intermediate mimics, β-1,2-aziridine and β-1,2-epoxide; and a product complex. The 1,2-epoxide intermediate mimic displayed hydrolytic and transfer reactivity analogous to that expected for the 1,2-anhydro sugar intermediate supporting its catalytic equivalence. Quantum mechanics/molecular mechanics modelling of the reaction coordinate predicted a reaction pathway through a 1,2-anhydro sugar via a transition state in an unprecedented flattened, envelope (<i>E</i><sub>3</sub>) conformation. Kinetic isotope effects for anomeric-<sup>2</sup>H and anomeric-<sup>13</sup>C support an oxocarbenium ion-like transition state and that for C2-<sup>18</sup>O (1.052 ± 0.006) directly implicates nucleophilic participation by the C2-hydroxyl. Collectively, these data substantiate this unprecedented and long-imagined enzymatic mechanism.</div><div><br></div>