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 O2-derived iron complex that abstracts hydrogen (H•) 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• 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 O2 implies that reduction of O2 and utilization of the resultant H2O2 were actually operant.