Phenylpyruvate decarboxylase (PPDC) of Azospirillum brasilense, involved in the biosynthesis of the plant hormone indole-3-acetic acid and the antimicrobial compound phenylacetic acid, is a thiamine diphosphate-dependent enzyme that catalyses the nonoxidative decarboxylation of indole- and phenylpyruvate. Analogous to yeast pyruvate decarboxylases, PPDC is subject to allosteric substrate activation, showing sigmoidal v versus [S] plots. The present paper reports the crystal structure of this enzyme determined at 1.5 Å resolution. The subunit architecture of PPDC is characteristic for other members of the pyruvate oxidase family, with each subunit consisting of three domains with an open α/β topology. An active site loop, bearing the catalytic residues His112 and His113, could not be modelled due to flexibility. The biological tetramer is best described as an asymmetric dimer of dimers. A cysteine residue that has been suggested as the site for regulatory substrate binding in yeast pyruvate decarboxylase is not conserved, requiring a different mechanism for allosteric substrate activation in PPDC. Only minor changes occur in the interactions with the cofactors, thiamine diphosphate and Mg2+, compared to pyruvate decarboxylase. A greater diversity is observed in the substrate binding pocket accounting for the difference in substrate specificity. Moreover, a catalytically important glutamate residue conserved in nearly all decarboxylases is replaced by a leucine in PPDC. The consequences of these differences in terms of the catalytic and regulatory mechanism of PPDC are discussed.