An open reading frame located at 69.0 kilobases on the Escherichia coli chromosome was shown to code for dihydroneopterin aldolase, catalyzing the conversion of 7,8-dihydroneopterin to 6-hydroxymethyl-7,8-dihydropterin in the biosynthetic pathway of tetrahydrofolate. The gene was subsequently designated folB. The FolB protein shows 30% identity to the paralogous dihydroneopterin-triphosphate epimerase, which is specified by the folX gene located at 2427 kilobases on the E. coli chromosome. The folX and folB gene products were both expressed to high yield in recombinant E. coli strains, and the recombinant proteins were purified to homogeneity. Both enzymes form homo-octamers. Aldolase can use L-threo-dihydroneopterin and D-erythro-dihydroneopterin as substrates for the formation of 6-hydroxymethyldihydropterin, but it can also catalyze the epimerization of carbon 2' of dihydroneopterin and dihydromonapterin at appreciable velocity. Epimerase catalyzes the epimerization of carbon 2' in the triphosphates of dihydroneopterin and dihydromonapterin. However, the enzyme can also catalyze the cleavage of the position 6 side chain of several pteridine derivatives at a slow rate. Steady-state kinetic parameters are reported for the various enzyme-catalyzed reactions. We propose that the polarization of the 2'-hydroxy group of the substrate could serve as the initial reaction step for the aldolase as well as for the epimerase activity. A deletion mutant obtained by targeting the folX gene of E. coli has normal growth properties on complete medium as well as on minimal medium. Thus, the physiological role of the E. coli epimerase remains unknown. The open reading frame ygiG of Hemophilus influenzae specifies a protein with the catalytic properties of an aldolase. However, the genome of H. influenzae does not specify a dihydroneopterin-triphosphate epimerase.