Tetrahydrofolate (THF) and its one-carbon derivatives, collectively termed folates, are essential cofactors, but are inherently unstable. While it is clear that chemical oxidation can cleave folates or damage their pterin precursors, very little is known about enzymatic damage to these molecules or about whether the folate biosynthesis pathway responds adaptively to damage to its end-products. The presence of a duplication of the gene encoding the folate biosynthesis enzyme 6-hydroxymethyl-7,8-dihydropterin pyrophosphokinase (FolK) in many sequenced bacterial genomes combined with a strong chromosomal clustering of the folK gene with panB, encoding the 5,10-methylene-THF-dependent enzyme ketopantoate hydroxymethyltransferase, led us to infer that PanB has a side activity that cleaves 5,10-methylene-THF, yielding a pterin product that is recycled by FolK. Genetic and metabolic analyses of Escherichia coli strains showed that overexpression of PanB leads to accumulation of the likely folate cleavage product 6-hydroxymethylpterin and other pterins in cells and medium, and-unexpectedly-to a 46% increase in total folate content. In silico modeling of the folate biosynthesis pathway showed that these observations are consistent with the in vivo cleavage of 5,10-methylene-THF by a side-activity of PanB, with FolK-mediated recycling of the pterin cleavage product, and with regulation of folate biosynthesis by folates or their damage products.