Natural products containing phosphorus-carbon bonds have found widespread use in medicine and agriculture. One such compound, phosphinothricin tripeptide, contains the unusual amino acid phosphinothricin attached to two alanine residues. Synthetic phosphinothricin (glufosinate) is a component of two top-selling herbicides (Basta and Liberty), and is widely used with resistant transgenic crops including corn, cotton and canola. Recent genetic and biochemical studies showed that during phosphinothricin tripeptide biosynthesis 2-hydroxyethylphosphonate (HEP) is converted to hydroxymethylphosphonate (HMP). Here we report the in vitro reconstitution of this unprecedented C(sp(3))-C(sp(3)) bond cleavage reaction and X-ray crystal structures of the enzyme. The protein is a mononuclear non-haem iron(ii)-dependent dioxygenase that converts HEP to HMP and formate. In contrast to most other members of this family, the oxidative consumption of HEP does not require additional cofactors or the input of exogenous electrons. The current study expands the scope of reactions catalysed by the 2-His-1-carboxylate mononuclear non-haem iron family of enzymes.