Alcohol oxidase (AO) is a homo-octameric flavoenzyme which catalyzes methanol oxidation in methylotrophic yeasts. AO protein is synthesized in the cytosol and subsequently sorted to peroxisomes where the active enzyme is formed. To gain further insight in the molecular mechanisms involved in AO activation, we studied spectroscopically native AO from Hansenula polymorpha and Pichia pastoris and three putative assembly intermediates. Fluorescence studies revealed that both Trp and FAD are suitable intramolecular markers of the conformation and oligomeric state of AO. A direct relationship between dissociation of AO octamers and increase in Trp fluorescence quantum yield and average fluorescence lifetime was found. The time-resolved fluorescence of the FAD cofactor showed a rapid decay component which reflects dynamic quenching due to the presence of aromatic amino acids in the FAD-binding pocket. The analysis of FAD fluorescence lifetime profiles showed a remarkable resemblance of pattern for purified AO and AO present in intact yeast cells. Native AO contains a high content of ordered secondary structure which was reduced upon FAD-removal. Dissociation of octamers into monomers resulted in a conversion of beta-sheets into alpha-helices. Our results are explained in relation to a 3D model of AO, which was built based on the crystallographic data of the homologous enzyme glucose oxidase from Aspergillus niger. The implications of our results for the current model of the in vivo AO assembly pathway are discussed.