PEB (phycoerythrobilin) is a pink-coloured open-chain tetrapyrrole molecule found in the cyanobacterial light-harvesting phycobilisome. Within the phycobilisome, PEB is covalently bound via thioether bonds to conserved cysteine residues of the phycobiliprotein subunits. In cyanobacteria, biosynthesis of PEB proceeds via two subsequent two-electron reductions catalysed by the FDBRs (ferredoxin-dependent bilin reductases) PebA and PebB starting from the open-chain tetrapyrrole biliverdin IXα. A new member of the FDBR family has been identified in the genome of a marine cyanophage. In contrast with the cyanobacterial enzymes, PebS (PEB synthase) from cyanophages combines both two-electron reductions for PEB synthesis. In the present study we show that PebS acts via a substrate radical mechanism and that two conserved aspartate residues at position 105 and 206 are critical for stereospecific substrate protonation and conversion. On the basis of the crystal structures of both PebS mutants and presented biochemical and biophysical data, a mechanism for biliverdin IXα conversion to PEB is postulated and discussed with respect to other FDBR family members.