ASCE ATPases include ring-translocases such as cellular helicases and viral DNA packaging motors (terminases). These motors have conserved Walker A and B motifs that bind Mg2+-ATP and a catalytic carboxylate that activates water for hydrolysis. Here we demonstrate that Glu179 serves as the catalytic carboxylate in bacteriophage λ terminase and probe its mechanistic role. All changes of Glu179 are lethal: non-conservative changes abrogate ATP hydrolysis and DNA translocation, while the conservative E179D change attenuates ATP hydrolysis and alters single molecule translocation dynamics, consistent with a slowed chemical hydrolysis step. Molecular dynamics simulations of several homologous terminases suggest a novel mechanism, supported by experiments, wherein the conserved Walker A arginine 'toggles' between interacting with a glutamate residue in the 'lid' subdomain and the catalytic glutamate upon ATP binding; this switch helps mediate a transition from an 'open' state to a 'closed' state that tightly binds nucleotide and DNA, and also positions the catalytic glutamate next to the γ-phosphate to align the hydrolysis transition state. Concomitant reorientation of the lid subdomain may mediate mechanochemical coupling of ATP hydrolysis and DNA translocation. Given the strong conservation of these structural elements in terminase enzymes, this mechanism may be universal for viral packaging motors.