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Glycoside hydrolase enzymes are important for hydrolyzing the β-1,4 glycosidic bond in polysaccharides for deconstruction of carbohydrates. The two-step retaining reaction mechanism of Glycoside Hydrolase Family 7 (GH7) was explored with different sized QM-cluster models built by the Residue Interaction Network ResidUe Selector (RINRUS) software using both the wild-type protein and its E217Q mutant. The first step is the glycosylation, in which the acidic residue 217 donates a proton to the glycosidic oxygen leading to bond cleavage. In the subsequent deglycosylation step, one water molecule migrates into the active site and attacks the anomeric carbon. Residue interaction-based QM-cluster models lead to reliable structural and energetic results for proposed glycoside hydrolase mechanisms. The free energies of activation for glycosylation in the largest QM-cluster models were predicted to be 19.5 and 31.4 kcal mol −1 for the wild-type protein and its E217Q mutant, which agree with experimental trends that mutation of the acidic residue Glu217 to Gln will slow down the reaction; and are higher in free energy than the deglycosylation transition states (13.8 and 25.5 kcal mol −1 for the wild-type protein and its mutant, respectively). For the mutated protein, glycosylation led to a low-energy product. This thermodynamic sink may correspond to the intermediate state which was isolated in the X-ray crystal structure. Hence, the glycosylation is validated to be the rate-limiting step in both the wild-type and mutated enzyme.