(S)-Mandelate dehydrogenase from Pseudomonas putida belongs to a FMN-dependent enzyme family that oxidizes (S)-alpha-hydroxyacids. Despite a high degree of sequence and structural similarity, this family can be divided into three subgroups based on the different oxidants utilized in the second oxidative half-reaction. Only the oxidases show high reactivity with molecular oxygen. Structural data indicate that the relative position of a peptide loop and the isoalloxazine ring of the FMN is slightly different in the oxidases compared to the dehydrogenases; the last residue on this loop is either an alanine or glycine. We examined the effect of the G81A, G81S, G81V, and G81D mutations in MDH on the overall reaction and especially on the suppression of activity with oxygen. G81A had a higher specificity for small substrates compared to that of wtMDH, though the affinity for (S)-mandelate was relatively unchanged. The rate of the first half-reaction was 20-130-fold slower for G81A and G81S; G81D and G81V had extremely low activity. Redox-potential measurements indicate that the reduction in activity is due to the decrease in electrophilicity of the FMN. The affinity for oxygen increased 10-15-fold for G81A and G81S relative to wtMDH; the rate of oxidation increased 2-fold for G81A. The increased reactivity with molecular oxygen did not correlate with the redox potentials and appears to primarily result from a higher affinity for oxygen. These results suggest that one of the ways the oxidase activity of MDH is controlled is through steric effects because of the relative positions of the FMN and the Gly81 loop.