Biosynthesis of the molybdenum cofactor, a chelate of molybdenum or tungsten with a novel pterin, occurs in virtually all organisms including humans. In the cofactor, the metal is complexed to the unique cis-dithiolene moiety located on the pyran ring of molybdopterin. Escherichia coli molybdopterin synthase, the protein responsible for adding the dithiolene to a desulfo precursor termed precursor Z, is a dimer of dimers containing the MoaD and MoaE proteins. The sulfur used for dithiolene formation is carried in the form of a thiocarboxylate at the MoaD C terminus. Using an intein expression system for preparation of thiocarboxylated MoaD, the mechanism of the molybdopterin synthase reaction was examined. A stoichiometry of 2 molecules of thiocarboxylated MoaD per conversion of a single precursor Z molecule to molybdopterin was observed. Examination of several synthase variants bearing mutations in the MoaE subunit identified Lys-119 as a residue essential for activity and Arg-39 and Lys-126 as other residues critical for the reaction. An intermediate of the synthase reaction was identified and characterized. This intermediate remains tightly associated with the protein and is the predominant product formed by synthase containing the K126A variant of MoaE. Mass spectral data obtained from protein-bound intermediate are consistent with a monosulfurated structure that contains a terminal phosphate group similar to that present in molybdopterin.