In this study, we investigated the mechanism of transformation by Bacillus subtilis strain 168 by proteomic analysis. B. subtilis strain 168 was able to stereoselectively transform cis-propenylphosphonic acid (cPPA) to fosfomycin. The maximal fosfomycin production was 816.6 μg/mL after two days cultivation, with a conversion rate of 36.05%. We separated the whole cellular proteins by two-dimensional gel electrophoresis (2-DE) method, and 562 protein spots were detected in the presence of cPPA in the medium, while 527 protein spots were detected in the absence of cPPA. Of them, 98 differentially expressed protein spots were found. Among them, 52 proteins were up-regulated whereas 20 were down-regulated in the presence of cPPA in the medium, and 26 induced at the presence of cPPA. The differentially expressed proteins were analyzed by combined MS and MS/MS methods. Eighty protein spots, including 45 up-regulated proteins, 17 down-regulated proteins, and 18 induced by cPPA were identified. Based on the results of proteomic analysis, we postulated two steps of transformation: in the first step, cPPA was hydrated to 2-hydroxypropylphosphonic acid; in the second step, 2-hydroxypropylphosphonic acid was transformed to fosfomycin via a dehydrogenation reaction.