Type I sulfatases require an unusual co-or post-translational modification for their activity in hydrolyzing sulfate esters. In eukaryotic sulfatases, an active site cysteine residue is oxidized to the aldehyde-containing C ␣ -formylglycine residue by the formylglycine-generating enzyme (FGE). The machinery responsible for sulfatase activation is poorly understood in prokaryotes. Here we describe the identification of a prokaryotic FGE from Mycobacterium tuberculosis. In addition, we solved the crystal structure of the Streptomyces coelicolor FGE homolog to 2.1 Å resolution. The prokaryotic homolog exhibits remarkable structural similarity to human FGE, including the position of catalytic cysteine residues. Both biochemical and structural data indicate the presence of an oxidized cysteine modification in the active site that may be relevant to catalysis. In addition, we generated a mutant M. tuberculosis strain lacking FGE. Although global sulfatase activity was reduced in the mutant, a significant amount of residual sulfatase activity suggests the presence of FGE-independent sulfatases in this organism.Type I sulfatases are members of an expanding family of enzymes that employ novel co-or post-translationally derived cofactors to facilitate catalysis (1, 2). The formylglycine (Fgly) 4 residue positioned within the active site of type I sulfatases is thought to undergo hydration to a gem-diol, after which one of the hydroxyl groups acts as a catalytic nucleophile to initiate sulfate ester cleavage (Fig. 1a) (3). The FGly residue is located within a ϳ13-residue consensus sequence termed the sulfatase motif (4) that defines this family of enzymes and is highly conserved throughout all domains of life (Fig. 1b). Although FGly is formed from cysteine residues in eukaryotic sulfatases, either cysteine (within the core motif CX[P/A]XR) or serine (SXPXR) can be oxidized to FGly in prokaryotic type I sulfatases. The coor post-translational machineries necessary for these respective modifications appear to be different; FGE is able to activate CXPXR-type sulfatases (5-7) and anaerobic sulfatase-maturating enzyme is responsible for modifying SXPXR-type sulfatases and CXAXR-type sulfatases (8, 9). Some prokaryotes, such as Mycobacterium tuberculosis, have only CXPXR-type sulfatases (10), whereas other species have only SXPXR-type sulfatases or a combination of type I sulfatases (11). Some prokaryotes also contain FGly-independent sulfatases. These sulfatases function by distinct enzymatic mechanisms and are divided into two categories, Fe(II) ␣-ketoglutarate-dependent dioxygenase sulfatases (type II sulfatases) and metallo--lactamase sulfatases (type III sulfatases) (12-14). Unlike type I sulfatases, which share a high degree of sequence similarity, type II and III sulfatases have highly divergent sequences, complicating the discovery of these proteins by genomic search algorithms.In higher eukaryotes, sulfatases are involved in a variety of essential tasks, including extracellular matrix remodeling and steroid titer regu...