L-asparaginases catalyze the asparagine hydrolysis to aspartate. These enzymes play an important role in the treatment of acute lymphoblastic leukemia because these cells are unable to produce their own asparagine. Due to the immunogenic response and various side effects of enzymes of bacterial origin, many attempts have been made to replace these enzymes with mammalian enzymes such as human asparaginase type III (hASNaseIII). This study investigates the reaction mechanism of hASNaseIII through molecular dynamics simulations, quantum mechanics/molecular mechanics methods, and free energy calculations. Our simulations reveal that the dimeric form of the enzyme plays a vital role in stabilizing the substrate in the active site, despite the active site residues coming from a single protomer. Protomer−protomer interactions are essential to keep the enzyme in an active conformation. Our study of the reaction mechanism indicates that the self-cleavage process that generates an N-terminal residue (Thr168) is required to activate the enzyme. This residue acts as the nucleophile, attacking the electrophilic carbon of the substrate after a proton transfer from its hydroxyl group to the N-terminal amino group. The reaction mechanism proceeds with the formation of an acyl-enzyme complex and its hydrolysis, which turns out to be the rate-determining step. Our proposal of the enzymatic mechanism sheds light on the role of different active site residues and rationalizes the studies on mutations. The insights provided here about hASNaseIII activity could contribute to the comprehension of the disparities among different ASNases and might even guide the design of new variants with improved properties for acute lymphoblastic leukemia treatment.