The enzyme system responsible for the conversion of 2-amino-4-oxo-6-(D-erythro-1',2',3'-trihydroxypropyl)-7,8-dihyd roptridine triphosphate (dihydroneopterin triphosphate or H2-NTP) to 2-amino-4-oxo-6-acetyl-7,8-dihydro-3H,9H-pyrimido[4,5-b]-[1,4]diazepine (pyrimidodiazepine or PDA), a precursor to the red eye pigments, he drosopterins, has been purified from the heads of Drosophila melanogaster. The PDA-synthesizing system consists of two components, a heat-stable enzyme and a heat-labile enzyme. The heat-stable enzyme can be replaced by sepiapterin synthase A, a previously purified enzyme required for the Mg2+-dependent conversion of H2-NTP to an unstable compound that appears to be 6-pyruvoyltetrahydropterin (pyruvoyl-H4-pterin). The heat-labile enzyme, purified to near-homogeneity and termed PDA synthase (Mr = 48,000), catalyzes the conversion of pyruvoyl-H4-pterin to PDA in a reaction requiring the presence of reduced glutathione. Because PDA is two electrons more reduced than pyruvoyl-H4-pterin, the reducing power required for this transformation is probably supplied by glutathione. The PDA-synthesizing system requires the presence of another thiol-containing compound such as 2-mercaptoethanol when incubation conditions 2-mercaptoethanol is no longer required. Evidence is presented to indicate that the Drosophila eye color mutant, sepia, is missing PDA synthase.