Pyrroloquinoline quinone (PQQ) is a tricyclic o-quinone, which serves as a cofactor in several enzyme-catalyzed redox reactions in certain bacteria. PQQ is also important for human health, and its role as a vitamin in mammals has recently been suggested. Although much is known about the function of enzymes that use PQQ as cofactor, relatively little is known about the biosynthesis of this coenzyme. Six gene products in Klebsiella pneumoniae (PqqA-F) are involved in PQQ biosynthesis, and PqqC has been shown to catalyze the last step in the pathway. The chemical structure of the substrate for PqqC has remained elusive and has hampered our understanding of the nature of this reaction. In this report we describe the purification and structure of the substrate as deduced by a number of spectroscopic and chemical methods. The substrate is 3a-(2-amino-2-carboxyethyl)-4,5-dioxo-4,5,6,7,8,9-hexahydroquinoline-7,9-dicarboxylic acid-a fully reduced derivative of PQQ, which has not undergone ring cyclization. These results show that PqqC catalyzes a novel reaction, which involves ring closure and an amazing eight-electron oxidation of the substrate.