Bacterial UDP-sugar dehydrogenases are part of the biosynthesis pathway of extracellular polysaccharides. These compounds act as important virulence factors by protecting the cell from opsonophagocytosis and complement-mediated killing. In Staphylococcus aureus, the protein Cap5O catalyzes the oxidation of UDP-N-acetyl-mannosamine to UDP-N-acetyl-mannosaminuronic acid. Cap5O is crucial for the production of serotype 5 capsular polysaccharide that prevents the interaction of bacteria with both phagocytic and nonphagocytic eukaryotic cells. However, details of its catalytic mechanism remain unknown. We thus crystallized Cap5O and solved the first structure of an UDP-N-acetyl-mannosamine dehydrogenase. This study revealed that the catalytic cysteine makes a disulfide bond that has never been observed in other structurally characterized members of the NDP-sugar dehydrogenase family. Biochemical and mutagenesis experiments demonstrated that the formation of this disulfide bridge regulates the activity of Cap5O. We also identified two arginine residues essential for Cap5O activity. Previous data suggested that Cap5O is activated by tyrosine phosphorylation, so we characterized the phosphorylation site and examined the underlying regulatory mechanism.