Cryptochromes are blue light receptors that regulate photomorphogenesis in plants and the circadian clock in animals and plants. Arabidopsis cryptochrome 2 (CRY2) mediates blue light inhibition of hypocotyl elongation and photoperiodic control of floral initiation. CRY2 undergoes blue light-induced phosphorylation, which was hypothesized to be associated with CRY2 photoactivation. To further investigate how light activates CRY2, we analyzed the physiological activities and phosphorylation of various CRY2 fusion proteins in transgenic plants. Our results showed that an 80-residue motif, referred to as NC80, was sufficient to confer the physiological function of CRY2. The GUS-NC80 fusion protein expressed in transgenic plants is constitutively active but unphosphorylated, suggesting that the blue light-induced CRY2 phosphorylation causes a conformational change to derepress the NC80 motif. Consistent with this hypothesis, the CRY2 C-terminal tail was found to be required for the blue light-induced CRY2 phosphorylation but not for the CRY2 activity. We propose that the PHR domain and the C-terminal tail of the unphosphorylated CRY2 form a “closed” conformation to suppress the NC80 motif in the absence of light. In response to blue light, the C-terminal tail of CRY2 is phosphorylated and electrostatically repelled from the surface of the PHR domain to form an “open” conformation, resulting in derepression of the NC80 motif and signal transduction to trigger photomorphogenic responses.