As the first in vitro characterization of a sugar N-oxidase, this study establishes CalE10 as the key oxidase involved in calicheamicin hydroxylamino glycoside formation. This study confirms that oxidation occurs at the sugar nucleotide stage prior to glycosyltransfer, and substrate specificity studies reveal CalE10-catalyzed oxidation to be regiospecific and to present trace amounts of the corresponding nitrosugar in vitro. This work also sets a precedent for the future study of other N-oxidases involved in hydroxylamino-, nitroso-, and/or nitrosugar formation.