Phycoerythrin (PE) present in the distal ends of light-harvesting phycobilisome rods in Fremyella diplosiphon (Tolypothrix sp. PCC 7601) contains five phycoerythrobilin (PEB) chromophores attached to six cysteine residues for efficient green light capture for photosynthesis. Chromophore ligation on PE subunits occurs through bilin lyase catalyzed reactions, but the characterization of the roles of all bilin lyases for phycoerythrin is not yet complete. To gain a more complete understanding about the individual functions of CpeZ and CpeY in PE biogenesis in cyanobacteria, we examined PE and phycobilisomes purified from wild type F. diplosiphon, cpeZ and cpeY knockout mutants. We find that the cpeZ and cpeY mutants accumulate less PE than wild type cells. We show that in the cpeZ mutant, chromophorylation of both PE subunits is affected, especially the Cys-80 and Cys-48/Cys-59 sites of CpeB, the beta-subunit of PE. The cpeY mutant showed reduced chromophorylation at Cys-82 of CpeA. We also show that, in vitro, CpeZ stabilizes PE subunits and assists in refolding of CpeB after denaturation. Taken together, we conclude that CpeZ acts as a chaperone-like protein, assisting in the folding/stability of PE subunits, allowing bilin lyases such as CpeY and CpeS to attach PEB to their PE subunit.