Acyltransferase from Mycobacterium smegmatis is a versatile enzyme, which catalyzes the transesterification of esters in aqueous media due to a kinetic preference of the synthesis reaction over the thermodynamically favored hydrolysis reaction. In the active octamer, the active site is deeply buried and connected to the protein surface by long and hydrophobic substrate access channels. The role of the access channel in controlling catalytic activity and substrate specificity was investigated by molecular dynamics simulations and Markov-state models, and the thermodynamics and kinetics of binding of acyl donors, acceptors, and water were compared. Despite the hydrophobic nature of the substrate access channel, water is present in the channel and competes with the acyl acceptors for access to the active site. The binding free energy profiles in the access channel and the flux of butyl and benzyl alcohol and vinyl acetate were analyzed in the concentration range between 10 and 500 mM and compared to water. The flux showed a maximum at an alcohol concentration of 50–100 mM, in agreement with experimental observations. At the maximum, the flux of alcohol approaches 50% of the flux of water, which explains the high transesterification rate as compared to hydrolysis. The molecular origin of this effect is due to the accumulation of alcohol molecules along the access channel. Extensive molecular dynamics simulations and analysis of trajectories by a Markov-state model provided insights into the role of the access channel in activity and specificity by controlling access and binding of competing substrates.