The phycobilin:cysteine 84-phycobiliprotein lyase, CpcS1, catalyzes phycocyanobilin (PCB) and phycoerythrobilin (PEB) attachment at nearly all cysteine 82 binding sites (consensus numbering) of phycoerythrin, phycoerythrocyanin, phycocyanin, and allophycocyanin (Zhao, K. H., Su, P., Tu, J. M., Wang, X., Liu, H., Plöscher, M., Eichacker, L., Yang, B., Zhou, M., and Scheer, H. (2007) Proc. Natl. Acad. Sci. U.S.A. 104, 14300-14305). We now show that CpcS1 binds PCB and PEB rapidly with bi-exponential kinetics (38/119 and 12/8300 ms, respectively). Chromophore binding to the lyase is reversible and much faster than the spontaneous, but low fidelity chromophore addition to the apo-protein in the absence of the lyase. This indicates kinetic control by the enzyme, which then transfers the chromophore to the apo-protein in a slow (tens of minutes) but stereo- and regioselectively corrects the reaction. This mode of action is reminiscent of chaperones but does not require ATP. The amino acid residues Arg-18 and Arg-149 of the lyase are essential for chromophore attachment in vitro and in Escherichia coli, mutations of His-21, His-22, Trp-75, Trp-140, and Arg-147 result in reduced activity (<30% of wild type in vitro). Mutants R147Q and W69M were active but had reduced capacity for PCB binding; additionally, with W69M there was loss of fidelity in chromophore attachment. Imidazole is a non-competitive inhibitor, supporting a bilin-binding function of histidine. Evidence was obtained that CpcS1 also catalyzes exchange of C-beta84-bound PCB in biliproteins by PEB.