Nicotinate dehydrogenase (NDH) from Eubacterium barkeri is a molybdoenzyme catalyzing the hydroxylation of nicotinate to 6-hydroxynicotinate. Reactivity of NDH critically depends on the presence of labile (nonselenocysteine) selenium with an as-yet-unidentified form and function. We have determined the crystal structure of NDH and analyzed its active site by multiple wavelengths anomalous dispersion methods. We show that selenium is bound as a terminal Mo=Se ligand to molybdenum and that it occupies the position of the terminal sulfido ligand in other molybdenum hydroxylases. The role of selenium in catalysis has been assessed by model calculations, which indicate an acceleration of the critical hydride transfer from the substrate to the selenido ligand in the course of substrate hydroxylation when compared with an active site containing a sulfido ligand. The MoO(OH)Se active site of NDH shows a novel type of utilization and reactivity of selenium in nature.