Tyrosine hydroxylase requires the regulatory cofactor, tetrahydrobiopterin, for catecholamine biosynthesis. Because guanosine triphosphate cyclohydrolase I is the rate limiting enzyme for the synthesis of this cofactor, it has a key role in catecholamine production. We show that GTP cyclohydrolase and tyrosine hydroxylase (TH) are co-localized in the Drosophila central nervous system. Mutations in the Punch locus, which encodes GTP cyclohydrolase, reduce TH activity; addition of cofactor to crude extracts could not fully rescue this activity in all mutant strains. The decrease in TH activity and the inability to increase it with added cofactor is not due to loss or decreased production of TH protein. We found that TH co-immunoprecipitated with GTP cyclohydrolase when wild type head extracts were incubated with anti-GTP cyclohydrolase antibody. We suggest that regulation of TH by its cofactor may require its association with GTP cyclohydrolase, and that the ability of GTP cyclohydrolase to associate with TH and its role in tetrahydrobiopterin synthesis may be separable functions of this enzyme. These results have important implications for understanding catecholamine-related neural diseases and designing strategies for gene therapy.