Vitamin B12 (cobalamin) is among the largest known non-polymeric natural products, and the only vitamin synthesized exclusively by microorganisms. The biosynthesis of the lower ligand of vitamin B(12), 5,6-dimethylbenzimidazole (DMB), is poorly understood. Recently, we discovered that a Sinorhizobium meliloti gene, bluB, is necessary for DMB biosynthesis. Here we show that BluB triggers the unprecedented fragmentation and contraction of the bound flavin mononucleotide cofactor and cleavage of the ribityl tail to form DMB and D-erythrose 4-phosphate. Our structural analysis shows that BluB resembles an NAD(P)H-flavin oxidoreductase, except that its unusually tight binding pocket accommodates flavin mononucleotide but not NAD(P)H. We characterize crystallographically an early intermediate along the reaction coordinate, revealing molecular oxygen poised over reduced flavin. Thus, BluB isolates and directs reduced flavin to activate molecular oxygen for its own cannibalization. This investigation of the biosynthesis of DMB provides clarification of an aspect of vitamin B12 that was otherwise incomplete, and may contribute to a better understanding of vitamin B12-related disease.