HD domain phosphohydrolase enzymes are characterized by a conserved set of histidine and aspartate residues that coordinate an active site metallocenter. Despite the important roles these enzymes play in nucleotide metabolism and signal transduction, few have been both biochemically and structurally characterized. Here, we present X-ray crystal structures and biochemical characterization of the Bacillus megaterium HD domain phosphohydrolase OxsA, involved in the biosynthesis of the antitumor, antiviral, and antibacterial compound oxetanocin-A. These studies reveal a previously uncharacterized reaction for this family; OxsA catalyzes the conversion of a triphosphorylated compound into a nucleoside, releasing one molecule of inorganic phosphate at a time. Remarkably, this functionality is a result of the OxsA active site, which based on structural and kinetic analyses has been tailored to bind the small, four-membered ring of oxetanocin-A over larger substrates. Furthermore, our OxsA structures show an active site that switches from a dinuclear to a mononuclear metal center as phosphates are eliminated from substrate.