The yeast protein Mpo1 belongs to a protein family that is widely conserved in bacteria, fungi, protozoa, and plants, and is the only protein of this family whose function has so far been elucidated. Mpo1 is an Fe2+-dependent dioxygenase that catalyzes the α-oxidation reaction of 2-hydroxy (2-OH) long-chain FAs (LCFAs) produced in the degradation pathway of the long-chain base phytosphingosine. However, several biochemical characteristics of Mpo1, such as its catalytic residues, membrane topology, and substrate specificity, remain unclear. Here, we report that yeast Mpo1 contains two transmembrane domains and that both its N- and C-terminal regions are exposed to the cytosol. Mutational analyses revealed that three histidine residues conserved in the Mpo1 family are especially important for Mpo1 activity, suggesting that they may be responsible for the formation of coordinate bonds with Fe2+ We found that, in addition to activity toward 2-OH LCFAs, Mpo1 also exhibits activity toward 2-OH very-long-chain FAs derived from the FA moiety of sphingolipids. These results indicate that Mpo1 is involved in the metabolism of long-chain to very-long-chain 2-OH FAs produced in different pathways. We noted that the growth of mpo1Δ cells is delayed upon carbon deprivation, suggesting that the Mpo1-mediated conversion of 2-OH FAs to nonhydroxy FAs is important for utilizing 2-OH FAs as a carbon source under carbon starvation. Our findings help to elucidate the as yet unknown functions and activities of other Mpo1 family members.