Hydroxyethylphosphonate dioxygenase (HEPD) catalyzes the O(2)-dependent cleavage of the carbon-carbon bond of 2-hydroxyethylphosphonate (2-HEP) to afford hydroxymethylphosphonate (HMP) and formate without input of electrons or use of any organic cofactors. Two mechanisms have been proposed to account for this reaction. One involves initial hydroxylation of substrate to an acetal intermediate and its subsequent attack onto an Fe(IV)-oxo species. The second mechanism features initial hydroperoxylation of substrate followed by a Criegee rearrangement. To distinguish between the two mechanisms, substrate analogues were synthesized and presented to the enzyme. Hydroxymethylphosphonate was converted into phosphate and formate, and 1-hydroxyethylphosphonate was converted to acetylphosphate, which is an inhibitor of the enzyme. These results provide strong support for a Criegee rearrangement with a phosphorus-based migrating group and require that the O-O bond of molecular oxygen is not cleaved prior to substrate activation. (2R)-Hydroxypropylphosphonate partitioned between conversion to 2-oxopropylphosphonate and hydroxymethylphosphonate, with the latter in turn converted to phosphate and formate. Collectively, these results support a mechanism that proceeds by hydroperoxylation followed by a Criegee rearrangement.