All of the peroxisomal ß-oxidation pathways characterized thus far house at least one MFE (multifunctional enzyme) catalysing two out of four reactions of the spiral. MFE type 2 proteins from various species display great variation in domain composition and predicted substrate preference. The gene CG3415 encodes for Drosophila melanogaster MFE-2 (DmMFE-2), complements the Saccharomyces cerevisiae MFE-2 deletion strain, and the recombinant protein displays both MFE-2 enzymatic activities in vitro. The resolved crystal structure is the first one for a full-length MFE-2 revealing the assembly of domains, and the data can also be transferred to structure-function studies for other MFE-2 proteins. The structure explains the necessity of dimerization. The lack of substrate channelling is proposed based on both the structural features, as well as by the fact that hydration and dehydrogenation activities of MFE-2, if produced as separate enzymes, are equally efficient in catalysis as the full-length MFE-2.