The widely used coelenterazine-powered Renilla luciferase was discovered over 40 years ago but the oxidative mechanism by which it generates blue photons remains unclear. Here we decipher Renilla-type bioluminescence through crystallographic, spectroscopic, and computational experiments. Structures of ancestral and extant luciferases complexed with the substrate-like analogue azacoelenterazine or a reaction product were obtained, providing unprecedented snapshots of coelenterazine-to-coelenteramide oxidation. Bound coelenterazine adopts a Y-shaped conformation, enabling the deprotonated imidazopyrazinone component to attack O2 via a radical charge-transfer mechanism. A high emission intensity is secured by an aspartate from a conserved proton-relay system, which protonates the excited coelenteramide product. Another aspartate on the rim of the catalytic pocket fine-tunes the electronic state of coelenteramide and promotes the formation of the blue light-emitting phenolate anion. The results obtained also reveal structural features distinguishing flash-type from glow-type bioluminescence, providing insights that will guide the engineering of next-generation luciferase‒luciferin pairs for ultrasensitive optical bioassays.