The complexity of eukaryotic multicellular organisms relies on evolutionary developments that include compartmentalization, alternative splicing, protein domain fusion and post-translational modification. Mammalian gephyrin uniquely exemplifies these processes by combining two enzymatic functions within the biosynthesis of the Moco (molybdenum cofactor) in a multidomain protein. It also undergoes extensive alternative splicing, especially in neurons, where it also functions as a scaffold protein at inhibitory synapses. Two out of three gephyrin domains are homologous to bacterial Moco-synthetic proteins (G and E domain) while being fused by a third gephyrin-specific central C domain. In the present paper, we have established the in vitro Moco synthesis using purified components and demonstrated an over 300-fold increase in Moco synthesis for gephyrin compared with the isolated G domain, which synthesizes adenylylated molybdopterin, and E domain, which catalyses the metal insertion at physiological molybdate concentrations in an ATP-dependent manner. We show that the C domain impacts the catalytic efficacy of gephyrin, suggesting an important structural role in product-substrate channelling as depicted by a structural model that is in line with a face-to-face orientation of both active sites. Our functional studies demonstrate the evolutionary advantage of domain fusion in metabolic proteins, which can lead to the development of novel functions in higher eukaryotes.