The complete DNA sequence of Candida albicans DIT2, encoding cytochrome P450 family 56 (CYP56), was obtained, and heterologous expression was achieved in Escherichia coli, where CYP56 was targeted to the membrane fraction. In reconstituted assays with the purified enzyme, CYP56 was shown to catalyze the conversion of N-formyl tyrosine into N,N'-bisformyl dityrosine, a reaction that was dependent on cytochrome P450 reductase, NADPH, and oxygen, yielding a turnover of 21.6 min(-1) and a k(s) of 26 microM. The Hill number was calculated as 1.6, indicating that two molecules of the substrate could bind to the protein. Azole antifungals could bind to the heme of CYP56 as a sixth ligand with high affinity. Both chromosomal alleles of CYP56 were disrupted using the SAT1 flipper technique, and CYP56 was found to be nonessential for cell viability under the culture conditions investigated. Susceptibility to azole drugs that bind to cytochromes P450 was tested, and the mutant showed unaltered susceptibility. However, the mutant showed increased susceptibility to the echinocandin drug caspofungin, suggesting an alteration in 1,3-glucan synthase and/or cell wall structure mediated by the presence of dityrosine. Phenotypically, the wild-type and mutant strains were morphologically similar when cultured in rich yeast extract-peptone-dextrose medium. However in minimal medium, the cyp56Delta mutant strain exhibited hyphal growth, in contrast to the wild-type strain, which grew solely in the yeast form. Furthermore, CYP56 was essential for chlamydospore formation.