Aspergillus fumigatus is a filamentous fungus that can cause severe respiratory disease in immunocompromised individuals. A putative sialidase from A. fumigatus was recently cloned and shown to be relatively poor in cleaving N-acetylneuraminic acid (Neu5Ac) in comparison with bacterial sialidases. Here we present the first crystal structure of a fungal sialidase. When the apo structure was compared with bacterial sialidase structures, the active site of the Aspergillus enzyme suggested that Neu5Ac would be a poor substrate because of a smaller pocket that normally accommodates the acetamido group of Neu5Ac in sialidases. A sialic acid with a hydroxyl in place of an acetamido group is 2-keto-3-deoxynononic acid (KDN). We show that KDN is the preferred substrate for the A. fumigatus sialidase and that A. fumigatus can utilize KDN as a sole carbon source. A 1.45-Å resolution crystal structure of the enzyme in complex with KDN reveals KDN in the active site in a boat conformation and nearby a second binding site occupied by KDN in a chair conformation, suggesting that polyKDN may be a natural substrate. The enzyme is not inhibited by the sialidase transition state analog 2-deoxy-2,3-dehydro-N-acetylneuraminic acid (Neu5Ac2en) but is inhibited by the related 2,3-didehydro-2,3-dideoxy-D-glycero-D-galacto-nonulosonic acid that we show bound to the enzyme in a 1.84-Å resolution crystal structure. Using a fluorinated KDN substrate, we present a 1.5-Å resolution structure of a covalently bound catalytic intermediate. The A. fumigatus sialidase is therefore a KDNase with a similar catalytic mechanism to Neu5Ac exosialidases, and this study represents the first structure of a KDNase.