The iron-dependent epoxidase HppE converts (S)-2-hydroxypropyl-1-phosphonate (S-HPP) to the antibiotic fosfomycin [(1R,2S)-epoxypropylphosphonate] in an unusual 1,3-dehydrogenation of a secondary alcohol to an epoxide. HppE has been classified as an oxidase, with proposed mechanisms differing primarily in the identity of the O-2-derived iron complex that abstracts hydrogen (H center dot) from C1 of S-HPP to initiate epoxide ring closure. We show here that the preferred cosubstrate is actually H2O2 and that HppE therefore almost certainly uses an iron(IV)-oxo complex as the H center dot abstractor. Reaction with H2O2 is accelerated by bound substrate and produces fosfomycin catalytically with a stoichiometry of unity. The ability of catalase to suppress the HppE activity previously attributed to its direct utilization of O-2 implies that reduction of O-2 and utilization of the resultant H2O2 were actually operant.