Abstract Several essential cellular metabolites, such as enzyme cofactors, contain sulfur atoms and their biosynthesis requires specific thiolation enzymes. LarE is an ATP‐dependent sulfur insertase, which catalyzes the sequential conversion of the two carboxylate groups of the precursor of the lactate racemase cofactor into thiocarboxylates. Two types of LarE enzymes are known, one that uses a catalytic cysteine as a sacrificial sulfur donor, and the other one that uses a [4Fe‐4S] cluster as a cofactor. Only the crystal structure of LarE from Lactobacillus plantarum (LpLarE) from the first class has been solved. We report here the crystal structure of LarE from Methanococcus maripaludis (MmLarE), belonging to the second class, in the cluster‐free (apo‐) and cluster‐bound (holo‐) forms. The structure of holo‐MmLarE shows that the [4Fe‐4S] cluster is chelated by three cysteines only, leaving an open coordination site on one Fe atom. Moreover, the fourth nonprotein‐bonded iron atom was able to bind an anionic ligand such as a phosphate group or a chloride ion. Together with the spectroscopic analysis of holo‐MmLarE and the previously reported biochemical investigations of holo‐LarE from Thermotoga maritima , these crystal structures support the hypothesis of a reaction mechanism, in which the [4Fe‐4S] cluster binds a hydrogenosulfide ligand in place of the chloride anion, thus generating a [4Fe‐5S] intermediate, and transfers it to the substrate, as in the case of [4Fe‐4S]‐dependent tRNA thiolation enzymes.