Biphenyls and dibenzofurans are the phytoalexins of the Maloideae, a subfamily of the economically important Rosaceae. The biphenyl aucuparin accumulated in Sorbus aucuparia L. cell cultures in response to yeast extract treatment. Incubation of cell-free extracts from challenged cell cultures with benzoyl-CoA and malonyl-CoA led to the formation of 3,5-dihydroxybiphenyl. This reaction was catalysed by a novel polyketide synthase, which will be named biphenyl synthase. The most efficient starter substrate for the enzyme was benzoyl-CoA. Relatively high activity was also observed with 2-hydroxybenzoyl-CoA but, instead of the corresponding biphenyl, the derailment product 2-hydroxybenzoyltriacetic acid lactone was formed.