The genome of the fungal plant pathogen Fusarium graminearum harbors six catalases, one of which has the sequence characteristics of a fatty acid peroxide-metabolizing catalase. We cloned and expressed this hemoprotein (designated as Fg-cat) along with its immediate neighbor, a 13S-lipoxygenase (cf. Brodhun et al, PloS One, e64919, 2013) that we considered might supply a fatty acid hydroperoxide substrate. Indeed, Fg-cat reacts abruptly with the 13S-hydroperoxide of linoleic acid (13S-HPODE) with an initial rate of 700–1300 s−1. By comparison there was no reaction with 9R- or 9S-HPODEs and extremely weak reaction with 13R-HPODE (~0.5% of the rate with 13S-HPODE). Although we considered Fg-cat as a candidate for the allene oxide synthase of the jasmonate pathway in fungi, the main product formed from 13S-HPODE was identified by UV, MS, and NMR as 9-oxo-10E-12,13-cis-epoxy-octadecenoic acid (with no traces of AOS activity). The corresponding analog is formed from the 13S-hydroperoxide of α-linolenic acid along with novel diepoxy-ketones and two C13 aldehyde derivatives, the reaction mechanisms of which are proposed. In a peroxidase assay monitoring the oxidation of ABTS, Fg-cat exhibited robust activity (kcat 550 s−1) using the 13S-hydroperoxy-C18 fatty acids as the oxidizing co-substrate. There was no detectable peroxidase activity using the corresponding 9S-hydroperoxides, nor with t-butyl hydroperoxide, and very weak activity with H2O2 or cumene hydroperoxide at micromolar concentrations of Fg-cat. Fg-cat and the associated lipoxygenase gene are present together in fungal genera Fusarium, Metarhizium and Fonsecaea and appear to constitute a partnership for oxidations in fungal metabolism or defense.