Isopenicillin N synthase (IPNS) is a non-haem iron oxidase that catalyses the formation of bicyclic isopenicillin N from δ-(L-α-aminoadipoyl)-L-cysteinyl-D-valine (ACV). In this study we report a novel activity for the iron of the IPNS active site, which behaves as a Lewis acid to catalyse the elimination of HF from the fluorinated substrate analogue, δ-(L-α-aminoadipoyl)-L-cysteinyl-D-β-fluorovaline (ACβFV). X-Ray crystallographic studies of IPNS crystals grown anaerobically with ACβFV reveal that the valinyl β-fluorine is missing from the active site region, and suggest the presence of the unsaturated tripeptide δ-(L-α-aminoadipoyl)-L-cysteinyl-D-isodehydrovaline in place of substrate ACβFV. 19F NMR studies confirm the release of fluoride from ACβFV in the presence of the active IPNS enzyme. These results suggest a new mode of reactivity for the IPNS iron centre, a mechanism of action that has not previously been reported for any of the iron oxidase enzymes.