EfeB/YcdB is a member of the dye-decolorizing peroxidase (DyP) protein family. A recent study has shown that this protein can extract iron from heme without breaking the tetrapyrrole ring. We report the crystal structure of EfeB from Escherichia coli O157 bound to heme at 1.95 Å resolution. The EfeB monomer contains two domains. The heme molecule is located in a large hydrophobic pocket in the C-terminal domain. A long loop connecting the two domains extensively interacts with the heme, which is a distinctive structural feature of EfeB homologues. A large tunnel formed by this loop and the β-sheet of C-terminal domain provides a potential cofactor/substrate binding site. Biochemical data show that the production of protoporphyrin IX (PPIX) is closely related to the peroxidation activity. The mutant D235N keeps nearly the same activity of guaiacol peroxidase as the wild-type protein, whereas the corresponding mutation in the classic DyP protein family completely abolished the peroxidation activity. These results suggest that EfeB is a unique member of the DyP protein family. In addition, dramatically enhanced fluorescence excitation and emission of EfeB-PPIX was observed, implying this protein may be used as a red color fluorescence marker.