The last step of the biosynthesis of fosfomycin, a clinically useful antibiotic, is the conversion of (S)-2-hydroxypropylphosphonic acid (HPP) to fosfomycin. Since the ring oxygen in fosfomycin has been shown in earlier feeding experiments to be derived from the hydroxyl group of HPP, this oxirane formation reaction is effectively a dehydrogenation process. To study this unique C-O bond formation step, we have overexpressed and purified the desired HPP epoxidase. Results reported herein provided initial biochemical evidence revealing that HPP epoxidase is an iron-dependent enzyme and that both NAD(P)H and a flavin or flavoprotein reductase are required for its activity. The 2 K EPR spectrum of oxidized iron-reconstituted fosfomycin epoxidase reveals resonances typical of S = 5/2 Fe(III) centers in at least two environments. Addition of HPP causes a redistribution with the appearance of at least two additional species, showing that the iron environment is perturbed. Exposure of this sample to NO elicits no changes, showing that the iron is nearly all in the Fe(III) state. However, addition, of NO to the Fe(II) reconstituted enzyme that has not been exposed to O2 yields an intense EPR spectrum typical of an S = 3/2 Fe(II)-NO complex. This complex is also heterogeneous, but addition of substrate converts it to a single, homogeneous S = 3/2 species with a new EPR spectrum, suggesting that substrate binds to or near the iron, thereby organizing the center. The fact that NO binds to the ferrous center suggests O2 can also bind at this site as part of the catalytic cycle. Using purified epoxidase and 18O isotopic labeled HPP, the retention of the hydroxyl oxygen of HPP in fosfomycin was demonstrated. While ether ring formation as a result of dehydrogenation of a secondary alcohol has precedence in the literature, these catalyses require α-ketoglutarate for activity. In contrast, HPP epoxidase is α-ketoglutarate independent. Thus, the cyclization of HPP to fosfomycin clearly represents an intriguing conversion beyond the scope entailed by common biological epoxidation and C-O bond formation.