Human dUTPase, essential for DNA integrity, is an important survival factor for cancer cells. We determined the crystal structure of the enzyme:alpha,beta-imino-dUTP:Mg complex and performed equilibrium binding experiments in solution. Ordering of the C-terminus upon the active site induces close juxtaposition of the incoming nucleophile attacker water oxygen and the alpha-phosphorus of the substrate, decreasing their distance below the van der Waals limit. Complex interactions of the C-terminus with both substrate and product were observed via a specifically designed tryptophan sensor, suitable for further detailed kinetic and ligand binding studies. Results explain the key functional role of the C-terminus.