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This picture shows one of the steps of heme synthesis. In this step two propanoate groups of coproporphyrinogen III are decarboxylated to form protoporphyrinogen IX. The enzyme that catalyses this step is an oxidase. Oxidase enzymes catalyze the removal of hydrogen in the presence of oxygen to form water or hydrogen peroxdide.

So, will a water molecule form in this step? 2H+ will come from the two carboxylate groups and oxygen will combine with it to form water. Will a water molecule form in this way?

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Oxidase enzymes catalyze the removal of hydrogen (addition of oxygen).. Oxidases don't add oxygen; they use oxygen as a cofactor or electron acceptor. Oxygenases are the ones that add oxygen. And all oxidases give rise to either $H_2O$ or $H_2O_2$ – WYSIWYG May 21 '14 at 7:54
Nonetheless, your title and the diagram is not really related to your actual question. Please clarify what exactly you want to ask. – WYSIWYG May 21 '14 at 7:56
@WYSIWYG, I have edited the question. – Rafique May 21 '14 at 11:15
so, will a water molecule form here? – Rafique May 21 '14 at 11:16

Seemingly the enzyme uses molecular oxygen in the reaction and one of the end products is water.

This reaction scheme is more detailed and presumably accurate.

In addition there is also a set of papers detailing coproporphyrinogen oxidase which was also on the website, hopefully one goes into more detail on the reaction.

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