Coumarin forms in melilotoside (trans-ortho-coumaric acid glucoside)-containing plant species upon cell damage. In moldy melilotoside-containing plant material, trans-ortho-coumaric acid is converted by fungi to 4-hydroxycoumarin, two molecules of which spontaneously combine with formaldehyde to give dicoumarol. Dicoumarol causes internal bleeding in livestock and is the forerunner of the warfarin group of medicinal anticoagulants. Here, we report 4-hydroxycoumarin formation by biphenyl synthase (BIS). Two new BIS cDNAs were isolated from elicitor-treated Sorbus aucuparia cell cultures. The encoded isoenzymes preferred ortho-hydroxybenzoyl (salicoyl)-CoA as a starter substrate and catalyzed a single decarboxylative condensation with malonyl-CoA to give 4-hydroxycoumarin. When elicitor-treated S. aucuparia cell cultures were fed with the N-acetylcysteamine thioester of salicylic acid, 4-hydroxycoumarin accumulated in the culture medium. Incubation of the BIS isoenzymes with benzoyl-CoA and malonyl-CoA resulted in the formation of 3,5-dihydroxybiphenyl which is the precursor of the phytoalexins of the Maloideae.