CblC is a chaperone that catalyzes removal of the beta-axial ligand of cobalamin (or B-12), generating cob(II)alamin in an early step in the cofactor trafficking pathway. Cob(II)alamin is subsequently partitioned to support cellular needs for the synthesis of active cobalamin cofactor derivatives. In addition to the beta-ligand transferase activity, the Caenorhabdiitis elegans CblC (ceCblC) and clinical R161G/Q variants of the human protein exhibit robust thiol oxidase activity, converting glutathione to glutathione disulfide while concomitantly reducing O-2 to H2O2. The chemical efficiency of the thiol oxidase side reaction during ceCblC-catalyzed dealkylation of alkylcobalamins is noteworthy in that it effectively scrubs ambient oxygen from the reaction mixture, leading to air stabilization of the highly reactive cob(I)alamin product. In this study, we report that the enhanced thiol oxidase activity of ceCblC requires the presence of KCl, which explains how the wasteful thiol oxidase activity is potentially curtailed inside cells where the chloride concentration is low. We have captured an unusual chlorocob(II)alamin intermediate that is formed in the presence of potassium chloride, a common component of the reaction buffer, and have characterized it by electron paramagnetic resonance, magnetic circular dichroism, and computational analyses. The ability to form a chlorocob(II)alamin intermediate could represent an evolutionary vestige in ceCblC, which is structurally related to bacterial B-12-dependent reductive dehalogenases that have been proposed to form halogen cob(II)alamin intermediates in their catalytic cycle.