The 3' region of the cpc operon of Synechococcus sp. PCC 7002 has been sequenced, transcriptionally characterized, and analyzed by interposon mutagenesis. The cpc operon contains six genes, 5' cpcB-cpcA-cpcC-cpcD-cpcE-cpcF 3', and gives rise to at least eight (more likely ten) discrete mRNA transcripts. The steady-state levels of transcripts for the cpcE and cpcF genes are very low and are estimated to represent only about 1-2% of the total transcripts arising from the cpc locus. The cpcE gene predicts a protein of 268 amino acid residues, whereas the cpcF gene predicts a protein of 205 amino acid residues. The deduced amino acid sequences of these proteins are about 50% identical and 70% similar to the predicted products of homologous genes which have been identified in other cyanobacterial cpc operons. Interposon insertion mutations were constructed in the cpcE and cpcF genes, and an interposon deletion mutation affecting both genes was constructed. The phenotypes of all mutant strains were similar. These strains were yellow-green in color, had doubling times approximately twice that of the wild-type strain, and failed to accumulate normal levels of phycocyanin. Further analyses indicated that these strains contained substantial amounts of apparently normal phycocyanin beta subunits; however the majority of the phycocyanin alpha subunit (about 90%) did not carry a phycocyanobilin chromophore. During serial subculturing of the mutant strains, suppressor mutations, which allowed cells to regain the ability to synthesize phycocyanin, arose at significant frequency. Based upon the results reported here, as well as those presented in the accompanying paper (Swanson, R. V., Zhou, J., Leary, J. A., Williams, T., de Lorimier, R., Bryant, D. A., and Glazer, A. N. (1992) J. Biol. Chem. 267, 16146-16154), we propose that the CpcE and CpcF polypeptides are the two subunits of a phycocyanobilin lyase specifically required for chromophorylation of the phycocyanin alpha subunit.