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Free methionine-R-sulfoxide reductase (fRMsr) reduces free methionine R-sulfoxide back to methionine, but its catalytic mechanism is poorly understood. Here, we have determined the crystal structures of the reduced, substrate-bound, and oxidized forms of fRMsr from Staphylococcus aureus. Our structural and biochemical analyses suggest the catalytic mechanism of fRMsr in which Cys(102) functions as the catalytic residue and Cys(68) as the resolving Cys that forms a disulfide bond with Cys(102). Cys(78), previously thought to be a catalytic Cys, is a non-essential residue for catalytic function. Additionally, our structures provide insights into the enzyme-substrate interaction and the role of active site residues in substrate binding. Structural comparison reveals that conformational changes occur in the active site during catalysis, particularly in the loop of residues 97-106 containing the catalytic Cys(102). We have also crystallized a complex between fRMsr and isopropyl alcohol, which acts as a competitive inhibitor for the enzyme. This isopropyl alcohol-bound structure helps us to understand the inhibitory mechanism of fRMsr. Our structural and enzymatic analyses suggest that a branched methyl group in alcohol seems important for competitive inhibition of the fRMsr due to its ability to bind to the active site.