The second step in the biosynthesis of the 22nd genetically encoded amino acid pyrrolysine (Pyl) is catalyzed by PylC that forms the pseudopeptide l-lysine-Nε-3R-methyl-d-ornithine. Here, we present six crystal structures of the monomeric active ligase in complex with substrates, reaction intermediates, and products including ATP, the non-hydrolyzable ATP analogue 5′-adenylyl-β-γ-imidodiphosphate, ADP, d-ornithine (d-Orn), l-lysine (Lys), phosphorylated d-Orn, l-lysine-Nε-d-ornithine, inorganic phosphate, carbonate, and Mg2 +. The overall structure of PylC reveals similarities to the superfamily of ATP-grasp enzymes; however, there exist unique structural and functional features for a topological control of successive substrate entry and product release. Furthermore, the presented high-resolution structures provide detailed insights into the reaction mechanism of isopeptide bond formation starting with phosphorylation of d-Orn by transfer of a phosphate moiety from activated ATP. The binding of Lys to the enzyme complex is then followed by an SN2 reaction resulting in l-lysine-Nε-d-ornithine and inorganic phosphate. Surprisingly, PylC harbors two adenine nucleotides bound at the active site, what has not been observed in any ATP-grasp protein analyzed to date. Whereas one ATP molecule is involved in catalysis, the second adenine nucleotide functions as a selective anchor for the C- and N-terminus of the Lys substrate and is responsible for protein stability as shown by mutagenesis. © 2012 Elsevier Ltd.