Microtubules (MTs) are large cytoskeletal polymers, composed of αβ-tubulin heterodimers, capable of stochastically converting from polymerizing to depolymerizing states and vice versa. Depolymerization is coupled with hydrolysis of guanosine triphosphate (GTP) within β-tubulin. Hydrolysis is favored in the MT lattice compared to a free heterodimer with an experimentally observed rate increase of 500- to 700-fold, corresponding to an energetic barrier lowering of 3.8 to 4.0 kcal/mol. Mutagenesis studies have implicated α-tubulin residues, α:E254 and α:D251, as catalytic residues completing the β-tubulin active site of the lower heterodimer in the MT lattice. The mechanism for GTP hydrolysis in the free heterodimer, however, is not understood. Additionally, there has been debate concerning whether the GTP-state lattice is expanded or compacted relative to the GDP state and whether a “compacted” GDP-state lattice is required for hydrolysis. In this work, extensive quantum mechanics/molecular mechanics simulations with transition-tempered metadynamics free-energy sampling of compacted and expanded interdimer complexes, as well as a free heterodimer, have been carried out to provide clear insight into the GTP hydrolysis mechanism. α:E254 was found to be the catalytic residue in a compacted lattice, while in the expanded lattice, disruption of a key salt bridge interaction renders α:E254 less effective. The simulations reveal a barrier decrease of 3.8 ± 0.5 kcal/mol for the compacted lattice compared to a free heterodimer, in good agreement with experimental kinetic measurements. Additionally, the expanded lattice barrier was found to be 6.3 ± 0.5 kcal/mol higher than compacted, demonstrating that GTP hydrolysis is variable with lattice state and slower at the MT tip.