The cyanobacterium Microcystis aeruginosa is widely known for its production of the potent hepatotoxin microcystin. This cyclic heptapeptide is synthesized non-ribosomally by the thiotemplate function of a large modular enzyme complex encoded within the 55-kb microcystin synthetase gene (mcy) cluster. The mcy gene cluster also encodes several stand-alone enzymes, putatively involved in the tailoring and export of microcystin. This study describes the characterization of the 2-hydroxy-acid dehydrogenase McyI, putatively involved in the production of D-methyl aspartate at position 3 within the microcystin cyclic structure. A combination of bioinformatics, molecular, and biochemical techniques was used to elucidate the structure, function, regulation, and evolution of this unique enzyme. The recombinant McyI enzyme was overexpressed in Escherichia coli and enzymatically characterized. The hypothesized native activity of McyI, the interconversion of 3-methyl malate to 3-methyl oxalacetate, was demonstrated using an in vitro spectrophotometric assay. The enzyme was also able to reduce ␣-ketoglutarate to 2-hydroxyglutarate and to catalyze the interconversion of malate and oxalacetate. Although NADP(H) was the preferred cofactor of the McyI-catalyzed reactions, NAD(H) could also be utilized, although rates of catalysis were significantly lower. The combined results of this study suggest that hepatotoxic cyanobacteria such as M. aeruginosa PCC7806 are capable of producing methyl aspartate via a novel glutamate mutase-independent pathway, in which McyI plays a pivotal role.The hepatotoxic microcystins compose the largest and most structurally diverse group of cyanobacterial toxins. Over 65 isoforms of microcystin varying by degree of methylation, hydroxylation, epimerization, peptide sequence, and toxicity have been identified (1). Underlying the extraordinary heterogeneity present among the microcystins is their common cyclic structure and possession of several rare nonproteinogenic amino acid moieties. Collectively, the microcystins may be described as monocyclic heptapeptides containing both D-and L-amino acids plus N-methyldehydroalanine and a unique -amino acid side group, 3-amino-9-methoxy-2,6,8-trimethyl-10-phenyldeca-4,6-dienoic acid (Fig. 1) (2). Although various amino acid substitutions can occur within the microcystin cyclic structure, the most common toxin isoform, microcystin LR, contains lysine and arginine at positions 2 and 4, respectively (Fig. 1).The microcystin biosynthesis (mcy) gene cluster was the first complex metabolite gene cluster to be fully sequenced from a cyanobacterium. In Microcystis aeruginosa PCC7806, the mcy gene cluster spans 55 kb and comprises 10 genes arranged in two divergently transcribed operons, mcyA-C and mcyD-J. Although most open reading frames within the mcy gene cluster have been assigned a function based on homologous entries in the data bases, no obvious function could be assigned to the 1014-bp gene mcyI. Preliminary sequence analysis of the inferred primary peptide seq...