Oxalobacter formigenes is an obligate anaerobe that colonizes the human gastrointestinal tract and employs oxalate breakdown to generate ATP in a novel process involving the interplay of two coupled enzymes and a membrane-bound oxalate:formate antiporter. Formyl-CoA transferase is a critical enzyme in oxalate-dependent ATP synthesis and is the first Class III CoA-transferase for which a high resolution, three-dimensional structure has been determined (Ricagno, S., Jonsson, S., Richards, N., and Lindqvist, Y. (2003) EMBO J. 22, 3210-3219). We now report the first detailed kinetic characterizations of recombinant, wild type formyl-CoA transferase and a number of site-specific mutants, which suggest that catalysis proceeds via a series of anhydride intermediates. Further evidence for this mechanistic proposal is provided by the x-ray crystallographic observation of an acylenzyme intermediate that is formed when formyl-CoA transferase is incubated with oxalyl-CoA. The catalytic mechanism of formyl-CoA transferase is therefore established and is almost certainly employed by all other members of the Class III CoA-transferase family.