The pathway for oxidative degradation of nicotine in Arthrobacter nicotinovorans includes two genetically and structurally unrelated flavoenzymes, 6-hydroxy-L-nicotine oxidase (6HLNO) and 6-hydroxy-D-nicotine oxidase, which act with absolute stereospecificity on the L- and D-forms, respectively, of 6-hydroxy-nicotine. We solved the crystal structure of 6HLNO at 1.95 A resolution by combined isomorphous/multiple-wavelength anomalous dispersion phasing. The overall structure of each subunit of the 6HLNO homodimer and the folds of the individual domains are closely similar as in eukaryotic monoamine oxidases. Unexpectedly, a diacylglycerophospholipid molecule was found to be non-covalently bound to each protomer of 6HLNO. The fatty acid chains occupy hydrophobic channels that penetrate deep into the interior of the substrate-binding domain of each subunit. The solvent-exposed glycerophosphate moiety is located at the subunit-subunit interface. We further solved the crystal structure of a complex of dithionite-reduced 6HLNO with the natural substrate 6-hydroxy-L-nicotine at 2.05 A resolution. The location of the substrate in a tight cavity suggests that the binding geometry of this unproductive complex may be closely similar as under oxidizing conditions. The observed orientation of the bound substrate relative to the isoalloxazine ring of the flavin adenine dinucleotide cofactor is suitable for hydride-transfer dehydrogenation at the carbon atom that forms the chiral center of the substrate molecule. A comparison of the substrate-binding modes of 6HLNO and 6-hydroxy-D-nicotine oxidase, based on models of complexes with the D-substrate, suggests an explanation for the stereospecificity of both enzymes. The two enzymes are proposed to orient the enantiomeric substrates in mirror symmetry with respect to the plane of the flavin.