In plants and bacteria that use a Type II fatty acid synthase (FAS), isozymes of acyl-acyl carrier protein (ACP) thioesterase (TEs) hydrolyze the thioester bond of acyl-ACPs, terminating the process of fatty acid biosynthesis. These TEs are therefore critical in determining the fatty acid profiles produced by these organisms. Past characterizations of a limited number of plant-sourced acyl-ACP TEs have suggested a thiol-based, papain-like catalytic mechanism, involving a triad of Cys, His, and Asn residues. In this study, sequence alignment of 1019 plant and bacterial acyl-ACP TEs revealed that the previously proposed Cys catalytic residue is not universally conserved and therefore may not be a catalytic residue. Systematic mutagenesis of this residue to either Ser or Ala in three plant acyl-ACP TEs, CvFatB1 and CvFatB2 from Cuphea viscosissima and CnFatB2 from Cocos nucifera, resulted in enzymatically active variants, demonstrating that this Cys residue (Cys348 in CvFatB2) is not catalytic. In contrast, the multiple sequence alignment, together with the structure modeling of CvFatB2 suggest that the highly conserved Asp309 and Glu347, in addition to previously proposed Asn311 and His313, may be involved in catalysis. The substantial loss of catalytic competence associated with site-directed mutants at these positions confirmed the involvement of these residues in catalysis. By comparing the structures of acyl-ACP TE and the Pseudomonas 4-hydroxybenzoyl-CoA TE, both of which fold in the same hot-dog tertiary structure and catalyze the hydrolysis reaction of thioester bond, we have proposed a two-step catalytic mechanism for acyl-ACP TE that involves an enzyme-bound anhydride intermediate.