The crystal structures of glutathione-dependent formaldehyde-activating enzyme (Gfa) from Paracoccus denitrificans, which catalyzes the formation of S-hydroxymethylglutathione from formaldehyde and glutathione, and its complex with glutathione (Gfa-GTT) have been determined. Gfa has a new fold with two zinc-sulfur centers, one that is structural (zinc tetracoordinated) and one catalytic (zinc apparently tricoordinated). In Gfa-GTT, the catalytic zinc is displaced due to disulfide bond formation of glutathione with one of the zinc-coordinating cysteines. Soaking crystals of Gfa-GTT with formaldehyde restores the holoenzyme. Accordingly, the displaced zinc forms a complex by scavenging formaldehyde and glutathione. The activation of formaldehyde and of glutathione in this zinc complex favors the final nucleophilic addition, followed by relocation of zinc in the catalytic site. Therefore, the structures of Gfa and Gfa-GTT draw the critical association between a dynamic zinc redox switch and a nucleophilic addition as a new facet of the redox activity of zinc-sulfur sites.