Ab initio density functional theory (DFT) methods were used to investigate the structural features of the active site of the binuclear enzyme rat liver arginase. Special emphasis was placed on the crucial role of the second shell ligand interactions. These interactions were systematically studied by performing calculations on models of varying size. It was determined that a water molecule, and not hydroxide, is the bridging exogenous ligand. The carboxylate ligands facilitate the close approach of the Mn (II) ions by attenuating the metal-metal electrostatic repulsion. Of the two metals, Mn(A) was shown to carry a larger positive charge. Analysis of the electronic properties of the active site revealed that orbitals involving the terminal Asp234 residue, as well as the flexible micro-1,1 bridging Asp232, lie at high energies, suggesting weaker coordination. This is reflected in certain structural variability present in our models and is also consistent with recent experimental findings. Finally, implications of our findings for the biological function of the enzyme are delineated.