Methyl transfer reactions are important in a number of biochemical pathways. An important class of methyltransferases uses the cobalt cofactor cobalamin, which receives a methyl group from an appropriate methyl donor protein to form an intermediate organometallic methyl-Co bond that subsequently is cleaved by a methyl acceptor. Control of the axial ligation state of cobalamin influences both the mode (i.e., homolytic vs heterolytic) and the rate of Co-C bond cleavage. Here we have studied the axial ligation of a corrinoid iron-sulfur protein (CFeSP) that plays a key role in energy generation and cell carbon synthesis by anaerobic microbes, such as methanogenic archaea and acetogenic bacteria. This protein accepts a methyl group from methyltetrahydrofolate forming Me-Co(3+)CFeSP that then donates a methyl cation (Me) from Me-Co(3+)CFeSP to a nickel site on acetyl-CoA synthase. To unambiguously establish the binding scheme of the corrinoid cofactor in the CFeSP, we have combined resonance Raman, magnetic circular dichroism, and EPR spectroscopic methods with computational chemistry. Our results clearly demonstrate that the Me-Co3+ and Co2+ states of the CFeSP have an axial water ligand like the free MeCbi+ and Co(2+)Cbi+ cofactors; however, the Co-OH2 bond length is lengthened by about 0.2 angstroms for the protein-bound cofactor. Elongation of the Co-OH2 bond of the CFeSP-bound cofactor is proposed to make the cobalt center more "Co1+-like", a requirement to facilitate heterolytic Co-C bond cleavage.