Geosmin is responsible for the characteristic odor of moist soil. Incubation of recombinant germacradienol synthase, encoded by the SCO6073 (SC9B1.20) gene of the Gram-positive soil bacterium Streptomyces coelicolor, with farnesyl diphosphate (2, FPP) in the presence of Mg2+ gave a mixture of (4S,7R)-germacra-1(10)E,5E-diene-11-ol (3) (74%), (-)-(7S)-germacrene D (4) (10%), geosmin (1) (13%), and a hydrocarbon, tentatively assigned the structure of octalin 5 (3%). Individual incubations of recombinant germacradienol synthase with [1,1-2H2]FPP (2a), (1R)-[1-2H]-FPP (2b), and (1S)-[1-2H]-FPP (2c), as well as with FPP (2) in D2O, and GC-MS analysis of the resulting deuterated products supported a mechanism of geosmin formation involving proton-initiated cyclization and retro-Prins fragmentation of the initially formed germacradienol to give intermediate 5, followed by protonation of 5, 1,2-hydride shift, and capture of water.