Monomeric sarcosine oxidase (MSOX) catalyzes the oxidation of N-methylglycine and contains covalently bound FAD that is hydrogen bonded at position N(5) to Lys265 via a bridging water. Lys265 is absent in the homologous but oxygen-unreactive FAD site in heterotetrameric sarcosine oxidase. Isolated preparations of Lys265 mutants contain little or no flavin but can be covalently reconstituted with FAD. Mutation of Lys265 to a neutral residue (Ala, Gln, Met) causes a 6000- to 9000-fold decrease in apparent turnover rate whereas a 170-fold decrease is found with Lys265Arg. Substitution of Lys265 with Met or Arg causes only a modest decrease in the rate of sarcosine oxidation (9.0- or 3.8-fold, respectively), as judged by reductive half-reaction studies which show that the reactions proceed via an initial enzyme.sarcosine charge transfer complex and a novel spectral intermediate not detected with wild-type MSOX. Oxidation of reduced wild-type MSOX (k = 2.83 x 10(5) M(-1) s(-1)) is more than 1000-fold faster than observed for the reaction of oxygen with free reduced flavin. Mutation of Lys265 to a neutral residue causes a dramatic 8000-fold decrease in oxygen reactivity whereas a 250-fold decrease is observed with Lys265Arg. The results provide definitive evidence for Lys265 as the site of oxygen activation and show that a single positively charged amino acid residue is entirely responsible for the rate acceleration observed with wild-type enzyme. Significantly, the active sites for sarcosine oxidation and oxygen reduction are located on opposite faces of the flavin ring.