The reactivity of a series of para-substituted phenolic compounds in the peroxidation catalyzed by chloroperoxidase was investigated, and the results were interpreted on the basis of the binding characteristics of the substrates to the active site of the enzyme. Marked selectivity effects are observed. These operate through charge, preventing phenolic compounds carrying amino groups on the substituent chain to act as substrates for the enzyme, and through size, excluding potential substrates containing bulky substituents to the phenol nucleus. Also, chiral recognition is exhibited by chloroperoxidase in the oxidation of N-acetyltyrosine, where only the L isomer is oxidized. Kinetic measurements show that, in general, the efficiency of chloroperoxidase in the oxidation of phenols is lower than that of horseradish peroxidase. Paramagnetic NMR spectra and relaxation rate measurements of chloroperoxidase-phenol complexes are consistent with binding of the substrates close to the heme, in the distal pocket, with the phenol group pointing toward the iron atom. On the other hand, phenolic compounds which are not substrates for chloroperoxidase bind to the enzyme with a much different disposition, with the phenol group very distant from the iron and probably actually outside the active-site cavity.