Streptomyces venezuelae CmlI catalyzes the six-electron oxygenation of the arylamine precursor of chloramphenicol in a nonribosomal peptide synthetase (NRPS)-based pathway to yield the nitroaryl group of the antibiotic. Optical, EPR, and Mössbauer studies show that the enzyme contains a nonheme dinuclear iron cluster. Addition of O2 to the diferrous state of the cluster results in an exceptionally long-lived intermediate (t1/2 = 3 h at 4 °C) that is assigned as a peroxodiferric species (CmlI-peroxo) based upon the observation of an 18O2-sensitive resonance Raman (rR) vibration. CmlI-peroxo is spectroscopically distinct from the well characterized and commonly observed cis-μ-1,2-peroxo (μ-η1:η1) intermediates of nonheme diiron enzymes. Specifically, it exhibits a blue-shifted broad absorption band around 500 nm and a rR spectrum with a β(O-O) that is at least 60 cm-1 lower in energy. Mössbauer studies of the peroxo state reveal a diferric cluster having iron sites with small quadrupole splittings and distinct isomer shifts (0.54 and 0.62 mm/s). Taken together, the spectroscopic comparisons clearly indicate that CmlI-peroxo does not have a μ- η1:η1-peroxo ligand; we propose that a μ- η1:η2-peroxo ligand accounts for its distinct spectroscopic properties. CmlI-peroxo reacts with a range of arylamine substrates by an apparent second-order process, indicating that CmlI-peroxo is the reactive species of the catalytic cycle. Efficient production of chloramphenicol from the free arylamine precursor suggests that CmlI catalyzes the ultimate step in the biosynthetic pathway and that the precursor is not bound to the NRPS during this step.