Siastatin B is a potent and effective iminosugar inhibitor of three diverse glycosidase classes, namely, sialidases, β-d-glucuronidases, and N-acetyl-glucosaminidases. The mode of inhibition of glucuronidases, in contrast to sialidases, has long been enigmatic as siastatin B appears too bulky and incorrectly substituted to be accommodated within a β-d-glucuronidase active site pocket. Herein, we show through crystallographic analysis of protein-inhibitor complexes that siastatin B generates both a hemiaminal and a 3-geminal diol iminosugar (3-GDI) that are, rather than the parent compound, directly responsible for enzyme inhibition. The hemiaminal product is the first observation of a natural product that belongs to the noeuromycin class of inhibitors. Additionally, the 3-GDI represents a new and potent class of the iminosugar glycosidase inhibitor. To substantiate our findings, we synthesized both the gluco- and galacto-configured 3-GDIs and characterized their binding both structurally and kinetically to exo-β-d-glucuronidases and the anticancer target human heparanase. This revealed submicromolar inhibition of exo-β-d-glucuronidases and an unprecedented binding mode by this new class of inhibitor. Our results reveal the mechanism by which siastatin B acts as a broad-spectrum glycosidase inhibitor, identify a new class of glycosidase inhibitor, and suggest new functionalities that can be incorporated into future generations of glycosidase inhibitors.