We have examined the interaction of phenylalanine hydroxylase with phenylalanine, tetrahydropterin cofactors, and an activating phospholipid, lysophosphatidylcholine. Incubation of native phenylalanine hydroxylase with phenylalanine or lysophosphatidylcholine results in an increase in the fluorescence emission of the enzyme at 360 nm, which closely parallels the increase in tetrahydrobiopterin-dependent activity observed under these conditions. The presence of tetrahydrobiopterin in the absence of phenylalanine results in quenching of the enzyme fluorescence emission; this quenching exhibits a sharp end point at about 1 mol of tetrahydrobiopterin bound/mol of enzyme subunit. The binding of tetrahydrobiopterin under these conditions is unexpectedly tight, with an estimated KD of 10-20 nM, while in the presence of lysophosphatidylcholine, the KD is increased to about 25 microM. Quenching experiments with sodium iodide indicate greater exposure of tryptophan residues in the phenylalanine-activated enzyme. The ultraviolet difference spectrum of phenylalanine hydroxylase in the presence of phenylalanine exhibits a peak at 238 nm, which correlates with the fluorescence increase and activation, as well as additional changes in the aromatic region, which do not correlate well with activation. Phenylalanine does not alter the far-ultraviolet circular dichroism spectrum of phenylalanine hydroxylase. In contrast, lysophosphatidylcholine appears to induce a dramatic change in enzyme secondary structure upon activation. These results suggest that activation of phenylalanine hydroxylase results in a conformation change and the exposure of buried tryptophan(s) and possibly a cysteine residue.