Methylamine dehydrogenase (MADH), an alpha 2 beta 2 enzyme from numerous methylotrophic soil bacteria, contains a novel quinonoid redox prosthetic group that is covalently bound to its small beta subunit through two amino acyl residues. A comparison of the amino acid sequence deduced from the gene sequence of the small subunit for the enzyme from Methylobacterium extorquens AM1 with the published amino acid sequence obtained by the Edman degradation method, allowed the identification of the amino acyl constituents of the cofactor as two tryptophyl residues. This information was crucial for interpreting 1H and 13C nuclear magnetic resonance, and mass spectral data collected for the semicarbazide- and carboxymethyl-derivatized bis(tripeptidyl)-cofactor of MADH from bacterium W3A1. The cofactor is composed of two cross-linked tryptophyl residues. Although there are many possible isomers, only one is consistent with all the data: The first tryptophyl residue in the peptide sequence exists as an indole-6,7-dione, and is attached at its 4 position to the 2 position of the second, otherwise unmodified, indole side group. Contrary to earlier reports, the cofactor of MADH is not 2,7,9-tricarboxypyrroloquinoline quinone (PQQ), a derivative thereof, or pro-PQQ. This appears to be the only example of two cross-linked, modified amino acyl residues having a functional role in the active site of an enzyme, in the absence of other cofactors or metal ions.