Cholesterol oxidase is a monomeric flavoenzyme that catalyzes the oxidation and isomerization of cholesterol to cholest-4-en-3-one. Two forms of the enzyme are known, one containing the cofactor non-covalently bound to the protein and one in which the cofactor is covalently linked to a histidine residue. The x-ray structure of the enzyme from Brevibacterium sterolicum containing covalently bound FAD has been determined and refined to 1.7-Angstrom resolution. The active site consists of a cavity sealed off from the exterior of the protein. A model for the steroid substrate, cholesterol, can be positioned in the pocket revealing the structural factors that result in different substrate binding affinities between the two known forms of the enzyme. The structure suggests that Glu(475), located at the active site cavity, may act as the base for both the oxidation and the isomerization steps of the catalytic reaction. A water-filled channel extending toward the Ravin moiety, inside the substrate-binding cavity, may act as the entry point for molecular oxygen for the oxidative half-reaction. An arginine and a glutamate residue at the active site, found in two conformations are proposed to control oxygen access to the cavity from the channel. These concerted side chain movements provide an explanation for the biphasic mode of reaction with dioxygen and the ping-pong kinetic mechanism exhibited by the enzyme.