Rat liver phenylalanine hydroxylase oxidizes a stoichiometric amount of its cofactor, 6-methyl-5,6,7,8-tetrahydropterin (6MPH4), in a reaction that is independent of phenylalanine. The reaction requires oxygen, and 1 6MPH4 is oxidized per subunit of enzyme. A quinonoid dihydropterin is directly produced in the reaction, and there is no evidence for the intermediate formation of a 4.alpha.-hydroxydihydropterin. Neither hydrogen peroxide nor superoxide anions were detected as products of the oxidation, and phenylalanine hydroxylase appears to be the sole electron acceptor from 6MPH4. Therefore, in a functional sense, phenylalanine hydroxylase is reduced by its cofactor. The reduced state of the enzyme is stable to activation by phenylalanine and during catalytic turnover, and the electrons on the reduced enzyme cannot be directly used to drive phenylalanine hydroxylation. Of greatest importance, enzyme reduction appears to be required for the formation of a catalytically active enzyme species. Phenylalanine hydroxylase is chemically and physically altered by reduction. Reduced enzyme exhibits a greatly increased fluorescence, which is quantitatively related to the extent of reduction, an altered UV-visible absorbance spectrum, a greatly increased sensitivity to inactivation by hydrogen peroxide, and a greatly decreased sensitivity to inhibition by dopa which quantitatively correlates with the increase in enzyme fluorescence. Second-order rate constants, kr, for the reduction of the enzyme by 6MPH4 were determined and found to vary with pH, temperature, buffer and enzyme activation: at pH 6.8, 25.degree. C, and in phosphate buffer, for phenylalanine-activated enzyme kr = 15 .times. 106 min-1 M-1. Tris is a competitive inhibitor with respect to 6MPH4 of enzyme reduction and also of catalysis.