Biosynthesis of the gibberellin (GA) plant hormones evolved independently in plants and microbes, but the pathways proceed by similar transformations. The combined demethylation and γ‐lactone ring forming transformation is of significant mechanistic interest, yet remains unclear. The relevant CYP112 from bacteria was probed by activity assays and 18O2‐labeling experiments. Notably, the ability of tert‐butyl hydroperoxide to drive this transformation indicates use of the ferryl‐oxo (Compound I) from the CYP catalytic cycle for this reaction. Together with the confirmed loss of C20 as CO2, this necessitates two catalytic cycles for carbon–carbon bond scission and γ‐lactone formation. The ability of CYP112 to hydroxylate the δ‐lactone form of GA15, shown by the labeling studies, is consistent with the implied use of a further oxygenated heterocycle in the final conversion of GA24 into GA9, with the partial labeling of GA9, thus demonstrating that CYP112 partitions its reactants between two diverging mechanisms.