The catalytic core of the peptidyl-alpha-hydroxyglycine alpha-amidating lyase (PAL) domain of peptidylglycine alpha-amidating monooxygenase was investigated with respect to its ability to function as a ureidoglycolate lyase and the identity and role of its bound metal ions. Purified PALcc contains molar equivalents of calcium and zinc along with substoichiometric amounts of iron and functions as a ureidoglycolate lyase. Limiting iron availability in the cells synthesizing PALcc reduces the specific activity of the enzyme produced. Concentrated samples of native PALcc have an absorption maximum at 560 nm, suggestive of a phenolate to Fe(III) charge transfer complex. An essential role for a Tyr residue was confirmed by elimination of PAL activity following site directed mutagenesis. Purified PALcc in which the only conserved Tyr residue was mutated to Phe (PALccY654F) is secreted normally but is catalytically inactive and lacks bound iron and bound zinc. Our data demonstrate an essential role for Tyr654 and suggest that it serves as an Fe(III)-ligand in an essential bimetallic Fe-Zn site.