Plant phytochromes are thought to transduce light signals by mediating the degradation of phytochrome-interacting transcription factors (PIFs) through the N-terminal photosensory module, while the C-terminal module, including a histidine kinase-related domain (HKRD), does not participate in signaling. Here we show that the C-terminal module of Arabidopsis phytochrome B (PHYB) is sufficient to mediate the degradation of PIF3 specifically and to activate photosynthetic genes in the dark. The HKRD is a dimerization domain for PHYB homo and heterodimerization. A D1040V mutation, which disrupts the dimerization of HKRD and the interaction between C-terminal module and PIF3, abrogates PHYB nuclear accumulation, photobody biogenesis, and PIF3 degradation. By contrast, disrupting the interaction between PIF3 and PHYB's N-terminal module has little effect on PIF3 degradation. Together, this study demonstrates that the dimeric form of the C-terminal module plays important signaling roles by targeting PHYB to subnuclear photobodies and interacting with PIF3 to trigger its degradation.