Acetyl coenzyme A:salutaridinol-7-O-acetyltransferase, a highly substrate-specific enzyme, has been purified nearly 3,000-fold to homogeneity from Papaver somniferum plant cell suspension cultures. Purification was achieved by fractionated ammonium sulfate precipitation, dye-ligand affinity chromatography on matrex red A, gel filtration, ion exchange chromatography on Mono Q and a second dye-ligand affinity chromatography on fractogel TSK AF Blue. The purified enzyme was a single polypeptide with an M(r) = 50,000 displaying an isoelectric point of 4.8, a pH optimum between pH 6 and 9 and a temperature optimum at 47 degrees C. The Km values for the substrate salutaridinol and the co-substrate acetyl co-enzyme A were 7 and 46 microM, respectively. Salutaridinol-7-O-acetyltransferase catalyzes the stoichiometric transfer of the acetyl group from acetyl coenzyme A to the 7-OH group of salutaridinol yielding salutaridinol-7-O-acetate, which is a new intermediate in morphine biosynthesis. Salutaridinol-7-O-acetate undergoes a subsequent spontaneous allylic elimination at pH 8-9, leading to the formation of thebaine (1), the first morphinan alkaloid with the complete pentacyclic ring system, or at pH 7 leading to dibenz[d,f]azonine alkaloids that contain a nine-membered ring. Acetylation and subsequent allylic elimination is a new enzymic mechanism in alkaloid biosynthesis, which in the poppy plant can transform one precursor into alkaloids possessing markedly different ring systems, depending on the reaction pH.