Molecular dynamics simulations of the protein chymotrypsin inhibitor 2 in 8 M urea at 60 degrees C were undertaken to investigate the molecular basis of chemical denaturation. The protein unfolded rapidly under these conditions, but it retained its native structure in a control simulation in water at the same temperature. The overall process of unfolding in urea was similar to that observed in thermal denaturation simulations above the protein's T(m) of 75 degrees C. The first step in unfolding was expansion of the hydrophobic core. Then, the core was solvated by water and later by urea. The denatured structures in both urea and at high temperature contained residual native helical structure, whereas the beta-structure was completely disrupted. The average residence time for urea around hydrophilic groups was six times greater than around hydrophobic residues and in all cases greater than the corresponding water residence times. Water self-diffusion was reduced 40% in 8 M urea. Urea altered water structure and dynamics, thereby diminishing the hydrophobic effect and encouraging solvation of hydrophobic groups. In addition, through urea's weakening of water structure, water became free to compete with intraprotein interactions. Urea also interacted directly with polar residues and the peptide backbone, thereby stabilizing nonnative conformations. These simulations suggest that urea denatures proteins via both direct and indirect mechanisms.