The photoactive yellow protein (PYP) is a bacterial photoreceptor which is the structural prototype for the PAS domain superfamily of regulators and receptors. PYP is known to have a unique p-hydroxycinnamic acid chromophore, covalently attached to a cysteine. To date, it has not been shown how holo-PYP is formed in vivo. Two genes, nearby pyp, were postulated to encode the biosynthetic enzymes, but only one was previously isolated and shown to have the requisite activity. By using a dual plasmid system, one expressing the PYP from Halorhodospira halophila and the other expressing a two-gene operon, consisting of tyrosine ammonia lyase and p-hydroxycinnamic acid ligase, we are able to present evidence that a functionally active holo-PYP can be synthesized in Escherichia coli. Plasmids containing only one of the two enzymes failed to produce holoprotein. Thus, the two genes have been shown to be both necessary and sufficient for production of holoprotein, although the activating group remains unknown. This expression system not only holds great potential for mutagenesis studies but also opens new possibilities in the search for (a) signaling partner(s) of the PYP.