2-C-methylerythritol 4-phosphate has been established recently as an intermediate of the deoxyxylulose phosphate pathway used for biosynthesis of terpenoids in plants and in many microorganisms. We show that an enzyme isolated from cell extract of Escherichia coli converts 2-C-methylerythritol 4-phosphate into 4-diphosphocytidyl-2-C-methylerythritol by reaction with CTP. The enzyme is specified by the hitherto unannotated ORF ygbP of E. coli. The cognate protein was obtained in pure form from a recombinant hyperexpression strain of E. coli harboring a plasmid with the ygbP gene under the control of a T5 promoter and lac operator. By using the recombinant enzyme, 4-diphosphocytidyl-[2-(14)C]2-C-methylerythritol was prepared from [2-(14)C]2-C-methylerythritol 4-phosphate. The radiolabeled 4-diphosphocytidyl-2-C-methylerythritol was shown to be efficiently incorporated into carotenoids by isolated chromoplasts of Capsicum annuum. The E. coli ygbP gene appears to be part of a small operon also comprising the unannotated ygbB gene. Genes with similarity to ygbP and ygbB are present in the genomes of many microorganisms, and their occurrence appears to be correlated with that of the deoxyxylulose pathway of terpenoid biosynthesis. Moreover, several microorganisms have genes specifying putative fusion proteins with ygbP and ygbB domains, suggesting that both the YgbP protein and the YgbB protein are involved in the deoxyxylulose pathway. A gene from Arabidopsis thaliana with similarity to ygbP carries a putative plastid import sequence, which is well in line with the assumed localization of the deoxyxylulose pathway in the plastid compartment of plants.