Hydroxylation at the C-16 position of the indole alkaloid tabersonine has been suggested as the first step toward vindoline biosynthesis in Catharanthus roseus. Tabersonine 16-hydroxylase (16-OH) activity was detected in total protein extracts from young leaves of C. roseus using a novel coupled assay system. Enzyme activity was dependent on NADPH and molecular oxygen and was inhibited by CO, clotrimazole, miconazole, and cytochrome c. 16-OH was localized to the endoplasmic reticulum by linear sucrose density gradient centrifugation. These data suggest that 16-OH is a cytochrome P-450-dependent monooxygenase. The activity of 16-OH reached a maximum in seedlings 9 d postimbibition and was induced by light. The leaf-specific distribution of 16-OH in the mature plant is consistent with the localization of other enzymes in the tabersonine to vindoline pathway. However, in contrast to enzymes that catalyze the last four steps of vindoline biosynthesis, enzymes responsible for the first two steps from tabersonine (16-OH and 16-O-methyltransfersase) were detected in C. roseus cell-suspension cultures. These data complement the complex model of vindoline biosynthesis that has evolved with respect to enzyme compartmentalization, metabolic transport, and control mechanisms.