As described previously, the carbon-halogen bond in alkyl halides is polarized, placing a partial positive charge on the carbon, and a partial negative charge on the halogen. The partially positive carbon is therefore electrophilic and will be susceptible to attack by nucleophiles. When a suitable nucleophile attacks an alkyl halide, it can displace the halogen in a substitution reaction to release the halide anion and form a new bond to the carbon, as shown below.

With simple primary alkyl halides reacting with simple nucleophiles, the rate at which this substitution reaction proceeds is proportional to both the concentration of the nucleophile and the concentration of the reactant alkyl halide, making the reaction second order. This type of second-order, nucleophilic displacement reaction is therefore termed an "S_N2" reaction (substitution, nucleophilic, bimolecular). The mechanism for this reaction is best described as concerted with the reaction coordinate passing through a single energy maximum with no distinct intermediate. The transition state for this reaction is described by the structure shown below in which partial bonds exist between the central carbon and the attacking nucleophile and departing halogen. An animation of this process also appears below.

Predicting the product from these types of substitution reactions simply requires that the bond to the halogen leaving group be broken and a new bond be made between the nucleophilic atom and the central carbon, inverting the absolute configuration if appropriate.

S_N2 reaction mechanisms are also involved in two common procedures which can be utilized to prepare alkyl halides from alcohols; that is reaction with PBr₃ and with SOCl₂. In the reaction with PBr₃, an intermediate phosphite ester is formed, which undergoes S_N2 displacement with bromide anion to give the alkyl bromide with inversion of configuration.

Thionyl chloride reacts by a similar mechanism involving a sulfite ester in polar solvents (i.e., pyridine), but can undergo an unusual S_Ni mechanism in non-polar solvents (benzene) to give the alkyl chloride with retention of configuration (this involves an unusual frontside attack, but is worth remembering since the pair of reactions gives you stereochemical control over the generation of an alkyl chloride).

Unlike primary alkyl halides, when most tertiary alkyl halides react with simple nucleophiles, the rate at which the substitution reaction proceeds is proportional only to the concentration of the alkyl halide, making the reaction first order. This type of first-order, nucleophilic displacement reaction is therefore termed an "S_N1" reaction (substitution, nucleophilic, unimolecular). The mechanism for this reaction is best described as stepwise with the involvement of a carbocation intermediate. The rate limiting step for this reaction is the spontaneous breaking of the carbon-halogen bond to form the carbocation, and the reaction with the nucleophile is generally fast. Since only the alkyl halide is present in the rate-limiting transition state, only alkyl halide concentration will effect the rate.

Since carbocations are involved, the reaction is prone to rearrangement, which may involve hydride shifts, alkyl group shifts or skeletal rearrangements.

The most significant factor in determining whether a given substitution reaction will follow an S_N1 or an S_N2 mechanism is the nature of the reactant; the more stable the potential carbocation, the more likely an S_N1 mechanism becomes. Therefore, primary alkyl halides will generally follow "pure" S_N2 pathways, tertiary alkyl halides will generally follow S_N1 pathways, and secondary alkyl halides may follow either, depending on the exact nature of the compound.