Tyrosine ammonia lyase (TAL) catalyzes the conversion of L-tyrosine to p-coumaric acid using a 3,5-dihydro-5-methylidene-4H-imidazole-4-one (MIO) prosthetic group. In bacteria, TAL is used for production of the photoactive yellow protein chromophore and for caffeic acid biosynthesis in certain actinomycetes. Here we biochemically examine wild-type and mutant forms of TAL from Rhodobacter sphaeroides (RsTAL). Kinetic analysis of RsTAL shows that the enzyme displays a 90-fold preference for L-tyrosine versus L-phenylalanine as a substrate. The pH-dependence of TAL activity with L-tyrosine and L-phenylalanine demonstrates a common protonation state for catalysis, but indicates a difference in charge-state for binding of either amino acid. Site-directed mutagenesis demonstrates that Ser150, Tyr60, and Tyr300 are essential for catalysis. Mutation of Ser150 to an alanine abrogates formation of the MIO prosthetic group, as shown by mass spectrometry, and prevents catalysis. The Y60F and Y300F mutants were inactive with both amino acid substrates, but bound p-coumaric and cinnamic acids with less than 12-fold changes in affinity compared the wild-type enzyme. Analysis of MIO-dithiothreitol adduct formation shows that the reactivity of the prosthetic group is not significantly altered by mutation of either Tyr60 or Tyr300. The mechanistic roles of Ser150, Tyr60, and Tyr300 are discussed in relation to the three-dimensional structure of RsTAL and related MIO-containing enzymes.