Heme oxygenase is a central enzyme of heme degradation and associated carbon monoxide biosynthesis. We have prepared the α-hydroxyheme-heme oxygenase complex, which is the first intermediate in the catalytic reaction. The active site structure of the complex was examined by optical absorption, EPR, and resonance Raman spectroscopies. In the ferric form of the enzyme complex, the heme iron is five coordinate high spin and the α-hydroxyheme group in the complex assumes a structure of an oxophlorin where the α-meso hydroxy group is deprotonated. In the ferrous form, the α-hydroxy group is protonated and consequently the prosthetic group assumes a porphyrin structure. The α-hydroxyheme group undergoes a redox-linked conversion between a keto and an enol form. The ferric α-hydroxyheme reacts with molecular oxygen to form a radical species. Reaction of the radical species with a reducing equivalent yields the verdoheme-heme oxygenase complex. Reaction of the ferrous α-hydroxyheme-heme oxygenase complex with oxygen also yields the verdoheme-enzyme complex. We conclude that the catalytic conversion of ferric α-hydroxyheme to verdoheme by heme oxygenase requires molecular oxygen and one reducing equivalent.