Streptomyces viridifaciens MG456-hF10 produces the antitumor agent valanimycin, which is a member of a family of antibiotics containing the azoxy group. An enzyme involved in the biosynthesis of valanimycin has been purified 360-fold from S. viridifaciens. This enzyme, isobutylamine N-hydroxylase, catalyzes the oxidation of isobutylamine to isobutylhydroxylamine in the presence of oxygen and a reduced flavin cofactor. Unlike other known N-hydroxylases, isobutylamine N-hydroxylase cannot carry out the reduction of the flavin cofactor. Rather, the reduced flavin is supplied by a separate flavin reductase that is present in extracts of S. viridifaciens. The reduced flavin cofactor could also be supplied by the flavin mononucleotide reductase of Vibrio fischeri. The requirement for molecular oxygen and a reduced flavin indicates that the N-hydroxylase is a flavin monooxygenase and that the mechanism for the hydroxylation is likely to proceed via the formation of a flavin 4a-hydroperoxide. Isobutylamine N-hydroxylase exhibited a subunit molecular mass of 40 kDa and existed in dimeric or trimeric form depending upon buffer conditions. The pI of the protein was found to be ca. 5.1 and the enzyme exhibited a sensitivity to thiol-directed reagents.