The tetrahydrobiopterin-dependent enzyme phenylalanine hydroxylase (PAH) contains one non-heme iron atom per subunit that is required for reactivity. We have applied circular dichroism (CD), magnetic circular dichroism (MCD), and variable-temperature, variable-field (VTVH) MCD spectroscopies to investigate the geometric and electronic structure Of the catalytically relevant ferrous active site and its interaction with the cofactor analogue 5-deaza-6-methyltetrahydropterin, in the absence and presence of substrate. Excited-state ligand field CD and MCD data indicate that the six-coordinate ferrous active site of the resting and N-ethylmaleimide-activated enzyme is not perturbed by the addition of pterin cofactor in the absence of substrate (Delta(5)E(g) = 1900 cm(-1), 10Dq = 9850 cm(-1)). VTVH MCD analysis yields a ground-slate splitting also consistent with an unperturbed six-coordinate ferrous site (Delta(5)T(2g) = -285 or -1150 cm(-1)). Addition of pterin in the presence of L-phenylalanine (L-Phe), however, results in large splittings of the excited- and ground-state orbitals (Delta(5)E(g) > 4600 cm(-1), 10Dq < 8800 cm(-1); Delta(5)T(2g) = +985 cm(-1)) that are indicative of a square-pyramidal five-coordinate ferrous site, Our results provide molecular-level insight into the observed sequential mechanistic order for PAH, L-Phe + BH4 + O-2, and offer the first evidence of an open coordination position on the iron prior to binding and activation of dioxygen. This directly implicates the iron in the coupled hydroxylation of substrate and cofactor, and shows that a highly reactive oxygen intermediate can be generated only when both are present.