How does a chemical reaction proceed at ultralow temperatures? Can simple quantum mechanical rules such as quantum statistics, single scattering partial waves, and quantum threshold laws provide a clear understanding for the molecular reactivity under a vanishing collision energy? Starting with an optically trapped near quantum degenerate gas of polar $^{40}$K$^{87}$Rb molecules prepared in their absolute ground state, we report experimental evidence for exothermic atom-exchange chemical reactions. When these fermionic molecules are prepared in a single quantum state at a temperature of a few hundreds of nanoKelvins, we observe p-wave-dominated quantum threshold collisions arising from tunneling through an angular momentum barrier followed by a near-unity probability short-range chemical reaction. When these molecules are prepared in two different internal states or when molecules and atoms are brought together, the reaction rates are enhanced by a factor of 10 to 100 due to s-wave scattering, which does not have a centrifugal barrier. The measured rates agree with predicted universal loss rates related to the two-body van der Waals length.
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