We purified an extracellular pyranose dehydrogenase (PDH) from the basidiomycete fungus Agaricus xanthoderma using ammonium sulfate fractionation and ion-exchange and hydrophobic interaction chromatography. The native enzyme is a monomeric glycoprotein (5% carbohydrate) containing a covalently bound FAD as its prosthetic group. The PDH polypeptide consists of 575 amino acids and has a molecular mass of 65 400 Da as determined by MALDI MS. On the basis of the primary structure of the mature protein, PDH is a member of the glucose-methanol-choline oxidoreductase family. We constructed a homology model of PDH using the 3D structure of glucose oxidase from Aspergillus niger as a template. This model suggests a novel type of bi-covalent flavinylation in PDH, 9-S-cysteinyl, 8-alpha-N3-histidyl FAD. The enzyme exhibits a broad sugar substrate tolerance, oxidizing structurally different aldopyranoses including monosaccharides and oligosaccharides as well as glycosides. Its preferred electron donor substrates are D-glucose, D-galactose, L-arabinose, and D-xylose. As shown by in situ NMR analysis, D-glucose and D-galactose are both oxidized at positions C2 and C3, yielding the corresponding didehydroaldoses (diketoaldoses) as the final reaction products. PDH shows no detectable activity with oxygen, and its reactivity towards electron acceptors is rather limited, reducing various substituted benzoquinones and complexed metal ions. The azino-bis-(3-ethylbenzthiazolin-6-sulfonic acid) cation radical and the ferricenium ion are the best electron acceptors, as judged by the catalytic efficiencies (k(cat)/K(m)). The enzyme may play a role in lignocellulose degradation.