Hinokiresinol synthase (HRS) from Asparagus of f icinalis consists of two subunits, α and β, and catalyzes an unusual decarboxylative rearrangement reaction of 4-coumaryl 4-coumarate to generate (Z)hinokiresinol with complete stereoselectivity. Herein, we describe the mechanism of rearrangement catalysis and the role played by the heterodimeric HRS, through structural and computational analyses. Our results suggest that the HRS reaction is unlikely to proceed via the previously hypothesized Claisen rearrangement mechanism. Instead, we propose that the 4-coumaryl 4-coumarate substrate is first cleaved into coumarate and an extended p-quinone methide, which then recombine to generate a new C−C bond. These processes are facilitated by proton transfers mediated by the basic residues (α-Lys164, α-Arg169, β-Lys168, and β-Arg173) in the cavity at the heterodimer interface. The active site residues, α-Asp165, β-Asp169, β-Trp17, β-Met136, and β-Ala171, play crucial roles in controlling the regioselectivity of the coupling between the fragmented intermediates as well as the stereoselectivity of the decarboxylation step, leading to the formation of the (Z)-hinokiresinol product.