Regulation by phosphorylation is a well-established mechanism for controlling biological activity of proteins. Recently, phosphorylation of serine 124 in human thymidylate synthase (hTS) has been shown to lower the catalytic activity of the enzyme. To clarify a possible mechanism of the observed influence, molecular dynamics (MD), essential dynamics (ED) and MM-GBSA studies were undertaken. Structures derived from the MD trajectories reveal incorrect binding alignment between the pyrimidine ring of the substrate, dUMP, and the pterine ring of the cofactor analogue, THF, in the active site of the phosphorylated enzyme. The ED analysis indicates changes in the behavior of collective motions in the phosphorylated enzyme, suggesting that the formation of the closed ternary complex is hindered. Computed free energies, in agreement with structural analysis, predict that the binding of dUMP and THF to hTS is favored in the native compared to phosphorylated state of the enzyme. The paper describes at the structural level how phosphorylation at the distant site influences the ligand binding. We propose that the 'phosphorylation effect' is transmitted from the outside loop of Ser 124 into the active site via a subtle mechanism initiated by the long-range electrostatic repulsion between the phosphate groups of dUMP and Ser124. The mechanism can be described in terms of the interplay between the two groups of amino acids: the link (residues 125-134) and the patch (residues 189-192), resulting in the change of orientation of the pyrimidine ring of dUMP, which, in turn, prevents the correct alignment between the latter ring and the pterin ring of THF.