Our previous studies suggest that the fully active form of Peptidylarginine deiminase 4 (PAD4) should be a dimer and not a monomer. This paper provides a plausible mechanism for the control of PAD4 catalysis by molecular interplay between its dimer-interface loop (I-loop) and its substrate-binding loop (S-loop). Mutagenesis studies revealed that two hydrophobic residues, W347 and V469, are critical for substrate binding at the active site; mutating these two residues led to a severe reduction in the catalytic activity. We also identified several hydrophobic amino acid residues (L6, L279 and V283) at the dimer interface. Ultracentrifugation analysis revealed that interruption of the hydrophobicity of this region decreases dimer formation and, consequently, enzyme activity. Molecular dynamic simulations and mutagenesis studies suggested that the dimer interface and the substrate-binding site of PAD4, which consist of the I-loop and the S-loop, respectively, are responsible for substrate binding and dimer stabilization. We identified five residues with crucial roles in PAD4 catalysis and dimerization: Y435 and R441 in the I-loop, D465 and V469 in the S-loop, and W548, which stabilizes the I-loop via van der Waals interactions with C434 and Y435. The molecular interplay between the S-loop and the I-loop is crucial for PAD4 catalysis.