The stereospecific oxidative degradation of uric acid to (S)-allantoin was recently shown to proceed via three enzymatic steps. The final conversion is a decarboxylation of the unstable intermediate 2-oxo-4-hydroxy-4-carboxy-5- ureidoimidazoline (OHCU) and is catalyzed by OHCU decarboxylase. Here we present the structures of Klebsiella pneumoniae OHCU decarboxylase in unliganded form and with bound allantoin. These structures provide evidence that ligand binding organizes the active site residues for catalysis. Modeling of the substrate and intermediates provides additional support for this hypothesis. In addition we characterize the steady state kinetics of this enzyme and report the first OHCU decarboxylase inhibitor, allopurinol, a structural isomer of hypoxanthine. This molecule is a competitive inhibitor of K. pneumoniae OHCU decarboxylase with a Ki of 30 ± 2 μM. Circular dichroism measurements confirm structural observations that this inhibitor disrupts the necessary organization of the active site. Our structural and biochemical studies also provide further insights into the mechanism of catalysis of OHCU decarboxylation.