Glycerol 3-phosphate dehydrogenase catalyzes reversible hydride transfer from glycerol 3-phosphate (G3P) to NAD + to form dihydroxyacetone phosphate; from the truncated substrate ethylene glycol to NAD + in a reaction activated by the phosphite dianion substrate fragment; and from G3P to the truncated nicotinamide riboside cofactor in a reaction activated by adenosine 5′-diphosphate, adenosine 5′-monophosphate, and ribose 5-phosphate cofactor fragments. The sum of the stabilization of the transition state for GPDH-catalyzed hydride transfer reactions of the whole substrates by the phosphodianion fragment of G3P and the ADP fragment of NAD + is 25 kcal/mol. Fourteen kcal/mol of this transition state stabilization is recovered as phosphite dianion and AMP activation of the reactions of the substrate and cofactor fragments. X-ray crystal structures for unliganded GPDH, for a binary GPDH•NAD + complex, and for a nonproductive ternary GPDH•NAD + •DHAP complex show that the ligand binding energy is utilized to drive an extensive protein conformational change that creates a caged complex for these ligands. The phosphite dianion and AMP fragments are proposed to activate GPDH for the catalysis of hydride transfer by stabilization of this active caged complex. The closure of a conserved loop during substrate binding stabilizes the G3P and NAD + complexes by interactions, respectively, with the Q295 and K296 loop side chains. The appearance and apparent conservation of two side chains that interact with the hydride donor and acceptor to stabilize the active closed enzyme are proposed to represent a significant improvement in the catalytic performance of GPDH.