Cyclodextrin glycosyltransferase (CGTase) is an enzyme of the alpha-amylase family, which uses a double displacement mechanism to process alpha-linked glucose polymers. We have determined two X-ray structures of CGTase complexes, one with an intact substrate at 2.1 Angstrom resolution, and the other with a covalently bound reaction Intermediate at 1.8 Angstrom resolution. These structures give evidence for substrate distortion and the covalent character of the intermediate and for the first time show, in atomic detail, how catalysis in the alpha-amylase family proceeds by the concerted action of all active site residues.