AbstractA recently discovered peroxygenase from the fungus Marasmius rotula (MroUPO) is able to catalyze the progressive one‐carbon shortening of medium and long‐chain mono‐ and dicarboxylic acids by itself alone, in the presence of H2O2. The mechanism, analyzed using H218O2, starts with an α‐oxidation catalyzed by MroUPO generating an α‐hydroxy acid, which is further oxidized by the enzyme to a reactive α‐keto intermediate whose decarboxylation yields the one‐carbon shorter fatty acid. Compared with the previously characterized peroxygenase of Agrocybe aegerita, a wider heme access channel, enabling fatty acid positioning with the carboxylic end near the heme cofactor (as seen in one of the crystal structures available) could be at the origin of the unique ability of MroUPO shortening carboxylic acid chains.