The reaction mechanism of acetylcholine hydrolysis by acetylcholinesterase, including both acylation and deacylation stages from the enzyme-substrate (ES) to the enzyme-product (EP) molecular complexes, is examined by using an ab initio type quantum mechanical - molecular mechanical (QM/MM) approach. The density functional theory PBE0/aug-6-31+G* method for a fairly large quantum part trapped inside the native protein environment, and the AMBER force field parameters in the molecular mechanical part are employed in computations. All reaction steps, including the formation of the first tetrahedral intermediate (TI1), the acylenzyme (EA) complex, the second tetrahedral intermediate (TI2), and the EP complex, are modeled at the same theoretical level. In agreement with the experimental rate constants, the estimated activation energy barrier of the deacylation stage is slightly higher than that for the acylation phase. The critical role of the non-triad Glu202 amino acid residue in orienting lytic water molecule and in stabilizing the second tetrahedral intermediate at the deacylation stage of the enzymatic process is demonstrated.