The thiamin- and flavin-dependent peripheral membrane enzyme pyruvate oxidase from E. coli catalyzes the oxidative decarboxylation of the central metabolite pyruvate to CO(2) and acetate. Concomitant reduction of the enzyme-bound flavin triggers membrane binding of the C terminus and shuttling of 2 electrons to ubiquinone 8, a membrane-bound mobile carrier of the electron transport chain. Binding to the membrane in vivo or limited proteolysis in vitro stimulate the catalytic proficiency by 2 orders of magnitude. The molecular mechanisms by which membrane binding and activation are governed have remained enigmatic. Here, we present the X-ray crystal structures of the full-length enzyme and a proteolytically activated truncation variant lacking the last 23 C-terminal residues inferred as important in membrane binding. In conjunction with spectroscopic results, the structural data pinpoint a conformational rearrangement upon activation that exposes the autoinhibitory C terminus, thereby freeing the active site. In the activated enzyme, Phe-465 swings into the active site and wires both cofactors for efficient electron transfer. The isolated C terminus, which has no intrinsic helix propensity, folds into a helical structure in the presence of micelles.