Clostridium propionicum converts lactate to propionate (Cardon, B.P., and Barker, H.A. (1947) Arch. Biochem. Biophys. 12, 165-171). We have obtained a soluble system that carries out this conversion as well as the hydration of acrylate to lactate and the reduction of acrylate to propionate. 3-Pentynyl-CoA inhibits reduction of acrylate and lactate to propionate, but not hydration of acrylate to lactate by cell extracts. The conversion probably involves CoA esters. When [beta-2H3] lactate is used as a substrate, the rate of propionate formation is reduced 1.8-fold, and the methyl group of the resulting propionate has lost 1.4 deuterium atoms. These results are consistent with the intermediate formation of acrylate (acrylyl-CoA) in the conversion of D-lactate to propionate. Two proteins, which we designate E I and E II, were purified to greater than 90% homogeneity. Together, they catalyze the hydration of acrylyl-CoA to lactyl-CoA. E I has an apparent molecular mass of 27,000 daltons and is rapidly and irreversibly inactivated by O2. E II consists of two subunits of molecular mass 41,000 and 48,000 daltons and contains equal amounts of riboflavin and flavin mononucleotide. Hydration of acrylyl-CoA to lactyl-CoA requires Mg2+ and catalytic quantities of ATP. GTP can replace ATP, but ADP and adenylyl imidodiphosphate cannot. We were unable to detect any stable intermediate during acrylyl-CoA hydration. Finally, we proposed a mechanism for this reaction.