7,8-Dihydro-D-neopterin 2',3'-cyclic phosphate (H(2)N-cP) is the first intermediate in biosynthesis of the pterin portion of tetrahydromethanopterin (H(4)MPT), a C(1) carrier coenzyme first identified in the methanogenic archaea. This intermediate is produced from GTP by MptA (MJ0775 gene product), a new class of GTP cyclohydrolase I [Grochowski, L. L., Xu, H., Leung, K., and White, R. H. (2007) Biochemistry 46, 6658-6667]. Here we report the identification of a cyclic phosphodiesterase that hydrolyzes the cyclic phosphate of H(2)N-cP and converts it to a mixture of 7,8-dihydro-D-neopterin 2'-monophosphate and 7,8-dihydro-d-neopterin 3'-monophosphate. The enzyme from Methanocaldococcus jannachii is designated MptB (MJ0837 gene product) to indicate that it catalyzes the second step of the biosynthesis of methanopterin. MptB is a member of the HD domain superfamily of enzymes, which require divalent metals for activity. Direct metal analysis of the recombinant enzyme demonstrated that MptB contained 1.0 mol of zinc and 0.8 mol of iron per protomer. MptB requires Fe(2+) for activity, the same as observed for MptA. Thus the first two enzymes involved in H(4)MPT biosynthesis in the archaea are Fe(2+) dependent.