Recent investigations have shown that, in cryptomonads, the phycobiliproteins are located within the thylakoid lumen rather than on the stromal side of this membrane as found in cyanobacteria and red algae. To examine possible mechanisms involved in targeting this protein to the thylakoid lumen, the plastid-encoded cpeB gene from Cryptomonas phi was sequenced. This gene encodes an open reading frame of 177 amino acids that is highly similar to known beta-phycoerythrin proteins. cpeB is expressed as a monocistronic transcript of approximately 680 bases. The genes for the alpha subunits of phycoerythrin are not co-transcribed with cpeB nor located anywhere near it. No evidence of amino- or carboxy-terminal extensions or interior modifications involved in directing the Cryptomonas beta-phycoerythrin into the lumen of the thylakoid could be detected. These data suggest that a novel mechanism may be involved in directing cryptomonad biliproteins to the thylakoid lumen.