The quantum chemical cluster approach has been used for modeling enzyme active sites and reaction mechanisms for more than two decades. In this methodology, a relatively small part of the enzyme around the active site is selected as a model, and quantum chemical methods, typically density functional theory, are used to calculate energies and other properties. The surrounding enzyme is modeled using implicit solvation and atom fixing techniques. Over the years, a large number of enzyme mechanisms have been solved using this method. The models have gradually become larger as a result of the faster computers, and new kinds of questions have been addressed. In this Account, we review how the cluster approach can be utilized in the field of biocatalysis. Examples from our recent work are chosen to illustrate various aspects of the methodology. The use of the cluster model to explore substrate binding is discussed first. It is emphasized that a comprehensive search is necessary in order to identify the lowest-energy binding mode(s). It is also argued that the best binding mode might not be the productive one, and the full reactions for a number of enzyme-substrate complexes have therefore to be considered to find the lowest-energy reaction pathway. Next, examples are given of how the cluster approach can help in the elucidation of detailed reaction mechanisms of biocatalytically interesting enzymes, and how this knowledge can be exploited to develop enzymes with new functions or to understand the reasons for lack of activity toward non-natural substrates. The enzymes discussed in this context are phenolic acid decarboxylase and metal-dependent decarboxylases from the amidohydrolase superfamily. Next, the application of the cluster approach in the investigation of enzymatic enantioselectivity is discussed. The reaction of strictosidine synthase is selected as a case study, where the cluster calculations could reproduce and rationalize the selectivities of both the natural and non-natural substrates. Finally, we discuss how the cluster approach can be used to guide the rational design of enzyme variants with improved activity and selectivity. Acyl transferase from Mycobacterium smegmatis serves as an instructive example here, for which the calculations could pinpoint the factors controlling the reaction specificity and enantioselectivity. The cases discussed in this Account highlight thus the value of the cluster approach as a tool in biocatalysis. It complements experiments and other computational techniques in this field and provides insights that can be used to understand existing enzymes and to develop new variants with tailored properties.