Stilbene synthases and the related bibenzyl synthases are plant polyketide synthases whose biological functions lie in the formation of antimicrobial phytoalexins. The formation of hydroxystilbenes from one molecule of acyl-CoA and three molecules of malonyl-CoA is catalyzed by a homodimeric 90 kDa protein and includes Claisen condensations and cleavage of a thioester followed by decarboxylation. Combining inhibitor studies, protein modifications, and site-directed mutagenesis, we were able to differentiate between the binding sites for malonyl-CoA and the regions responsible for the selection of the primer, p-coumaroyl-CoA or m-hydroxyphenylpropionyl-CoA, respectively. Mutations in the C-terminal part of the molecule or modification by photolabeling with p-azidocinnamoyl-CoA influence the overall reaction, the formation of hydroxystilbenes, but leave partial reactions, such as the malonyl-CoA:CO2 exchange and the malonyl-CoA-dependent modification of the enzyme, unaffected. Data obtained with several kinds of stilbene synthase and mutant forms suggest that the malonyl-CoA-dependent covalent modification takes place at a cysteine residue in the N-terminal part of the enzyme. Mutations in the C-terminal half of the enzyme molecule do not interfere with the malonyl-CoA-dependent reactions.