The sequential activities of PhnY, an alpha-ketoglutarate/Fe(II)-dependent dioxygenase, and PhnZ, a Fe(II)-dependent enzyme of the histidine-aspartate motif hydrolase family, cleave the carbon-phosphorus bond of the organophosphonate natural product 2-aminoethylphosphonic acid. PhnY adds a hydroxyl group to the alpha-carbon, yielding 2-amino-1-hydroxyethylphosphonic acid, which is oxidatively converted by PhnZ to inorganic phosphate and glycine. The PhnZ reaction represents a new enzyme mechanism for metabolic cleavage of a carbon-phosphorus bond.