Vanillyl-alcohol oxidase (VAO) is member of a newly recognized flavoprotein family of structurally related oxidoreductases. The enzyme contains a covalently linked FAD cofactor. To study the mechanism of flavinylation we have created a design point mutation (His-61 → Thr). In the mutant enzyme the covalent His-C8α-flavin linkage is not formed, while the enzyme is still able to bind FAD and perform catalysis. The H61T mutant displays a similar affinity for FAD and ADP (Kd = 1.8 and 2.1 μM, respectively) but does not interact with FMN. H61T is about 10-fold less active with 4-(methoxymethyl)phenol) (kcat = 0.24 s-1, Km = 40 μM) than the wild-type enzyme. The crystal structures of both the holo and apo form of H61T are highly similar to the structure of wild-type VAO, indicating that binding of FAD to the apoprotein does not require major structural rearrangements. These results show that covalent flavinylation is an autocatalytical process in which His-61 plays a crucial role by activating His-422. Furthermore, our studies clearly demonstrate that in VAO, the FAD binds via a typical lock-and-key approach to a preorganized binding site.