RluB catalyses the modification of U2605 to pseudouridine (Ψ) in a stem-loop at the peptidyl transferase center of Escherichia coli 23S rRNA. The homolog RluF is specific to the adjacent nucleotide in the stem, U2604. The 1.3 Å resolution crystal structure of the complex between the catalytic domain of RluB and the isolated substrate stem-loop, in which the target uridine is substituted by 5-fluorouridine (5-FU), reveals a covalent bond between the isomerized target base and tyrosine 140. The structure is compared with the catalytic domain alone determined at 2.5 Å resolution. The RluB-bound stem-loop has essentially the same secondary structure as in the ribosome, with a bulge at A2602, but with 5-FU2605 flipped into the active site. We showed earlier that RluF induced a frame-shift of the RNA, moving A2602 into the stem and translating its target, U2604, into the active site. A hydrogen-bonding network stabilizes the bulge in the RluB-RNA but is not conserved in RluF and so RluF cannot stabilize the bulge. On the basis of the covalent bond between enzyme and isomerized 5-FU we propose a Michael addition mechanism for pseudouridine formation that is consistent with all experimental data.