Baeyer-Villiger monooxygenases (BVMOs) have been shown to play key roles for the biosynthesis of important natural products. MtmOIV, a homodimeric FAD- and NADPH-dependent BVMO, catalyzes the key frame-modifying steps of the mithramycin biosynthetic pathway, including an oxidative C-C bond cleavage, by converting its natural substrate premithramycin B into mithramycin DK, the immediate precursor of mithramycin. The drastically improved protein structure of MtmOIV along with the high-resolution structure of MtmOIV in complex with its natural substrate premithramycin B are reported here, revealing previously undetected key residues that are important for substrate recognition and catalysis. Kinetic analyses of selected mutants allowed us to probe the substrate binding pocket of MtmOIV and also to discover the putative NADPH binding site. This is the first substrate-bound structure of MtmOIV providing new insights into substrate recognition and catalysis, which paves the way for the future design of a tailored enzyme for the chemo-enzymatic preparation of novel mithramycin analogues.