Isopenicillin N synthase from Cephalosporium acremonium (IPNS; M(r) 38.4 K) is an Fe2+-requiring enzyme which catalyzes the oxidative conversion Of (L-alpha-amino-delta-adipoyl)-L-cysteinyl-D-valine (ACV) to isopenicillin N, with concomitant reduction of O2 to 2H2O. Chemical and spectroscopic data have suggested that catalysis proceeds via an enzyme complex of ACV bound to the iron through its cysteinyl thiolate [Baldwin, J. E., & Abraham, E. P. (1988) Nat. Prod. Rep. 5, 129-145; Chen, V. J., Orville, A. M., Harpel, M. R., Frolik, C. A., Surerus, K. K., Munck, E., & Lipscomb, J. D. (1989) J. Biol. Chem. 264, 21677-2168 1; Ming, L.-J., Que, L., Jr., Kriauciunas, A., Frolik, C. A., & Chen, V. J. (I 99 1) Biochemistry 30, 11653-11659]. Here we have employed the technique of Fe K-edge extended X-ray absorption fine structure (EXAFS) to characterize the iron site and to seek direct evidence for or against the formation of an Fe-S interaction upon ACV binding. Our data collected in the absence of substrate and O2 are consistent with the iron center of IPNS being coordinated by only (N,O)-containing ligands in an approximately octahedral arrangement and with an average Fe-(N,O) distance of 2.15 +/- 0.02 angstrom. Upon anaerobic binding of ACV, the iron coordination environment changes considerably, and the associated Fe EXAFS cannot be adequately simulated without incorporating an Fe-S interaction at 2.34 +/- 0.02 angstrom along with four or five Fe-(N,O) interactions at 2.15 +/- 0.02 angstrom. Although these data cannot rule out incorporation of an endogenous thiolate from the protein coincident with ACV binding, evidence presented in the following paper indicates that the thiolate ligand originates from ACV [Orville, A. M., Chen, V. J., Kriauciunas, A., Harpel, M. R., Fox, B. G., Munck, E., & Lipscomb, J. D. (1992) Biochemistry (following paper in this issue)]. Multiple-scattering analysis of the EXAFS data shows that two or three of the Fe-(N,O) interactions are likely due to histidyl imidazole ligation, both in the presence and in the absence of ACV.