Torulene, a C(40) carotene, is the precursor of the end product of the Neurospora carotenoid pathway, the C(35) xanthophyll neurosporaxanthin. Torulene is synthesized by the enzymes AL-2 and AL-1 from the precursor geranylgeranyl diphosphate and then cleaved by an unknown enzyme into the C(35) apocarotenoid. In general, carotenoid cleavage reactions are catalyzed by carotenoid oxygenases. Using protein data bases, we identified two putative carotenoid oxygenases in Neurospora, named here CAO-1 and CAO-2. A search for novel mutants of the carotenoid pathway in this fungus allowed the identification of two torulene-accumulating strains, lacking neurosporaxanthin. Sequencing of the cao-2 gene in these strains revealed severe mutations, pointing to a role of CAO-2 in torulene cleavage. This was further supported by the identical phenotype found upon targeted disruption of cao-2. The biological function was confirmed by in vitro assays using the purified enzyme, which cleaved torulene to produce beta-apo-4'-carotenal, the corresponding aldehyde of neurosporaxanthin. The specificity of CAO-2 was shown by the lack of gamma-carotene-cleaving activity in vitro. As predicted for a structural gene of the carotenoid pathway, cao-2 mRNA was induced by light in a WC-1 and WC-2 dependent manner. Our data demonstrate that CAO-2 is the enzyme responsible for the oxidative cleavage of torulene in the neurosporaxanthin biosynthetic pathway.