Photolyases contain two chromophores, flavin plus either methenyltetrahydrofolate (MTHF) or 8-OH-5-deazaflavin (HDF). Amino acid sequence comparison reveals that all photolyases sequenced to date have extensive sequence homology in the carboxyl-terminal half; in the amino-terminal region the folate and deazaflavin class enzymes are more homologous to other members of the same class. This modular arrangement of sequence homologies suggests that the amino-terminal half of photolyase is involved in MTHF or HDF binding whereas the carboxyl-terminal half carries the flavin binding site. In this study we attempted to identify such structural domains of yeast photolyase by partial proteolysis and gene fusion techniques. Partial digestion with chymotrypsin yielded an amino-terminal 34-kDa fragment containing tightly bound MTHF and a carboxyl-terminal 20-kDa polypeptide which lacked chromophore or DNA binding activity. However, a fusion protein carrying the carboxyl-terminal 275 amino acids of yeast photolyase bound specifically to FAD but not to MTHF or DNA. We conclude that the amino-terminal half of yeast photolyase constitutes the folate binding domain and that the carboxyl-terminal half carries the flavin binding site.