5-Aminolevulinic acid dehydratase (ALAD), an early enzyme of the tetrapyrrole biosynthesis pathway, catalyzes the dimerization of 5-aminolevulinic acid to form the pyrrole, porphobilinogen. ALAD from Escherichia coli is shown to form a homo-octameric structure with 422 symmetry in which each subunit adopts the TIM barrel fold with a 30-residue N-terminal arm. Pairs of monomers associate with their arms wrapped around each other. Four of these dimers interact, principally via their arm regions, to form octamers in which each active site is located on the surface. The active site contains two lysine residues (195 and 247), one of which (Lys 247) forms a Schiff base link with the bound substrate analogue, levulinic acid. Of the two substrate binding sites (referred to as A and P), our analysis defines the residues forming the P-site, which is where the first ALA molecule to associate with the enzyme binds. The carboxyl group of the levulinic acid moiety forms hydrogen bonds with the side chains of Ser 273 and Tyr 312. In proximity to the levulinic acid is a zinc binding site formed by three cysteines (Cys 120, 122, and 130) and a solvent molecule. We infer that the second substrate binding site (or A-site) is located between the triple-cysteine zinc site and the bound levulinic acid moiety. Two invariant arginine residues in a loop covering the active site (Arg 205 and Arg 216) appear to be appropriately placed to bind the carboxylate of the A-site substrate. Another metal binding site, close to the active site flap, in which a putative zinc ion is coordinated by a carboxyl and five solvent molecules may account for the activating properties of magnesium ions.