Cofactor‐independent phosphoglycerate mutase (iPGM), an important enzyme in glycolysis and gluconeogenesis, catalyses the isomerization of 2‐ and 3‐phosphoglycerates by an Mn2+‐dependent phospho‐transfer mechanism via a phospho‐enzyme intermediate. Crystal structures of bi‐domain iPGM from Staphylococcus aureus, together with substrate‐bound forms, have revealed a new conformation of the enzyme, representing an intermediate state of domain movement. The substrate‐binding site and the catalytic site are present in two distinct domains in the intermediate form. X–ray crystallography complemented by simulated dynamics has enabled delineation of the complete catalytic cycle, which includes binding of the substrate, followed by its positioning into the catalytic site, phospho‐transfer and finally product release. The present work describes a novel mechanism of domain movement controlled by a hydrophobic patch that is exposed on domain closure and acts like a spring to keep the protein in open conformation. Domain closing occurs after substrate binding, and is essential for phospho‐transfer, whereas the open conformation is a prerequisite for efficient substrate binding and product dissociation. A new model of catalysis has been proposed by correlating the hinge‐bending motion with the phospho‐transfer mechanism.