The aerobic biosynthetic pathway for vitamin B12 (cobalamin) biosynthesis is reviewed. Particular attention is focused on the ring contraction process, whereby an integral carbon atom of the tetrapyrrole-derived macrocycle is removed. Previous work had established that this chemically demanding step is facilitated by the action of a mono-oxygenase called CobG, which generates a hydroxy lactone intermediate. This mono-oxygenase contains both a non-haem iron and an Fe-S centre, but little information is known about its mechanism. Recent work has established that in bacteria such as Rhodobacter capsulatus, CobG is substituted by an isofunctional protein called CobZ. This protein has been shown to contain flavin, haem and Fe-S centres. A mechanism is proposed to explain the function of CobZ. Another interesting aspect of the aerobic cobalamin biosynthetic pathway is cobalt insertion, which displays some similarity to the process of magnesium chelation in chlorophyll synthesis. The genetic requirements of cobalt chelation and the subsequent reduction of the metal ion are discussed.