In recent years, radiolabeled tracers targeting prostate-specific membrane antigen (PSMA) have had a tremendous impact on prostate cancer management. Here, we report on the formation of radioactive impurities formed during the clinical production of 177Lu-labeled PSMA-617. We provide compelling evidence that these impurities are the result of a spontaneous, thermally mediated condensation reaction of the Glu-CO-Lys moiety resulting in the formation of three different five-membered ring systems. Density functional theory (DFT) calculations show that the condensation and cyclization of the Glu-CO-Lys moiety is thermodynamically spontaneous. In cell experiments, no affinity of these cyclized compounds toward PSMA was observed. HPLC analyses of urine samples from patient studies showed rapid renal excretion of these radioactive cyclized species. Radiolabeling conditions were identified that significantly reduced the formation of cyclized side products yielding 177Lu-labeled PSMA-617 in high radiochemical yield and purity in concordance with current good manufacturing practice (cGMP) requirements.