The ultimate step in chloramphenicol (CAM) biosynthesis is a six-electron oxidation of an aryl-amine precursor (NH2-CAM) to the aryl-nitro group of CAM catalyzed by the non-heme diiron cluster-containing oxygenase CmlI. Upon exposure of the diferrous cluster to O2, CmlI forms a long-lived peroxo intermediate, P, which reacts with NH2-CAM to form CAM. Since P is capable of at most a two-electron oxidation, the overall reaction must occur in several steps. It is unknown whether P is the oxidant in each step or whether another oxidizing species participates in the reaction. Mass spectrometry product analysis of reactions under (18)O2 show that both oxygen atoms in the nitro function of CAM derive from O2. However, when the single-turnover reaction between (18)O2-P and NH2-CAM is carried out in an (16)O2 atmosphere, CAM nitro groups contain both (18)O and (16)O, suggesting that P can be reformed during the reaction sequence. Such reformation would require reduction by a pathway intermediate, shown here to be NH(OH)-CAM. Accordingly, the aerobic reaction of NH(OH)-CAM with diferric CmlI yields P and then CAM without an external reductant. A catalytic cycle is proposed in which NH2-CAM reacts with P to form NH(OH)-CAM and diferric CmlI. Then the NH(OH)-CAM rereduces the enzyme diiron cluster, allowing P to reform upon O2 binding, while itself being oxidized to NO-CAM. Finally, the reformed P oxidizes NO-CAM to CAM with incorporation of a second O2-derived oxygen atom. The complete six-electron oxidation requires only two exogenous electrons and could occur in one active site.