The radical S-adenosylmethionine (SAM) protein PqqE is predicted to function in the pyrroloquinoline quinone (PQQ) biosynthetic pathway via catalysis of carbon-carbon bond formation between a glutamate and tyrosine side chain within the small peptide substrate PqqA. We report here that PqqE activity is dependent on the accessory protein PqqD, which was recently shown to bind PqqA tightly. In addition, PqqE activity in vitro requires the presence of a flavodoxin- and flavodoxin reductase-based reduction system, with other reductants leading to an uncoupled cleavage of the co-substrate SAM. These results indicate that PqqE, in conjunction with PqqD, carries out the first step in PQQ biosynthesis: a radical-mediated formation of a new carbon-carbon bond between two amino acid side chains on PqqA.