Molecular dynamics simulations of hen egg-white lysozyme in the free and substrate-bound states are reported and the nature of the average structures and atomic fluctuations are analyzed. Crystallographic water molecules of structural importance, as determined by hydrogen-bonding, were included in the simulations. Comparisons are made between the dynamics and the X-ray results for the atomic positions, the main-chain and side-chain dihedral angles, and the hydrogen-bonding geometry. Improvements over earlier simulations in the potential energy function and methodology resulted in stable trajectories with the C alpha co-ordinates within 1.5 A of the starting X-ray structure. Structural features analyzed in the simulations agreed well with the X-ray results except for some surface residues. The Asx chi 2 dihedral distribution and the geometry of hydrogen bonding at reverse turns show differences; possible causes are discussed. The relation between the magnitudes and time-scales of the residue fluctuations and secondary structural features, such as helices beta-sheets and coiled loops, is examined. Significant differences in the residue mobilities between the simulations of the free and substrate-bound states were found in a region of the enzyme that is in direct contact with the substrate and in a region that is distant from the active-site cleft. The dynamic behavior of the structural water molecules is analyzed by examining the correlation between the fluctuations of the water oxygens and the lysozyme heavy-atoms to which they are hydrogen-bonded.