Lignin peroxidase (LiP) plays a central role in the biodegradation of the plant cell wall constituent lignin. LiP is able to oxidize aromatic compounds with redox potentials higher than 1.4 V (NHE) by single electron abstraction, but the exact redox mechanism is still poorly understood. The finding in our laboratory that the Cbeta-atom of Trp171 carries a unique modification led us to initiate experiments to investigate the role of this residue. These experiments, employing crystallography, site-directed mutagenesis, protein chemistry, spin-trapping and spectroscopy, yielded the following results: (i) Trp171 is stereospecifically hydroxylated at its Cbeta-atom as the result of an auto-catalytic process, which occurs under turnover conditions in the presence of hydrogen peroxide. (ii) Evidence for the formation of a Trp171 radical intermediate has been obtained using spin-trapping, in combination with peptide mapping and protein crystallography. (iii) Trp171 is very likely to be involved in electron transfer from natural substrates to the haem cofactor via LRET. (iv) Mutagenetic substitution of Trp171 abolishes completely the oxidation activity for veratryl alcohol, but not for artificial substrates. (v) Structural changes in response to the mutation are marginal. Therefore the lack of activity is due to the absence of the redox active indole side chain.