The anhydrofructose pathway describes the degradation of glycogen and starch to metabolites via 1,5-anhydro-D-fructose (1,5AnFru). Enzymes that form 1,5AnFru, ascopyrone P (APP), and ascopyrone M (APM) have been reported from our laboratory earlier. In the present study, APM formed from 1,5AnFru was found to be the intermediate to the antimicrobial microthecin. The microthecin forming enzyme from the fungus Phanerochaete chrysosporium proved to be aldos-2-ulose dehydratase (AUDH, EC 4.2.1.-), which was purified and characterized for its enzymatic and catalytic properties. The purified AUDH showing a molecular mass of 97.4 kDa on SDS-PAGE was partially sequenced. Total 332 amino acid residues in length were obtained, representing some 37% of the AUDH protein. The obtained amino acid sequences showed no homology to known proteins but to an unannotated DNA sequence in Scaffold 62 of the published genome of the fungus. The alignment revealed three introns of the identified AUDH gene (Audh; ph.chr), thus the first gene coding for a neutral sugar dehydratase is identified. AUDH was found to be a bi-functional enzyme, being able to dehydrate 1,5AnFru to APM and further isomerizing the APM formed to microthecin. The optimal pH for the formation of APM and microthecin was pH 5.8 and 6.8, respectively. AUDH showed 5 fold higher activity toward 1,5AnFru than toward its analogue glucosone, when tested at concentrations from 0.6 mM to 0.2 M. Based on the characteristic UV absorbance of microthecin (230 nm) and APM (262 nm) assay methods were developed for the microthecin forming enzymes.