Prenylated flavonoids are natural compounds that often represent the active components in various medicinal plants and exhibit beneficial effects on human health. Prenylated flavonoids are hybrid products composed of a flavonoid core mainly attached to either 5-carbon (dimethylallyl) or 10-carbon (geranyl) prenyl groups derived from isoprenoid (terpenoid) metabolism, and the prenyl groups are crucial for their biological activity. Prenylation reactions in vivo are crucial coupling processes of two major metabolic pathways, the shikimate-acetate and isoprenoid pathways, in which these reactions are also known as a rate-limiting step. However, none of the genes responsible for the prenylation of flavonoids has been identified despite more than 30 years of research in this field. We have isolated a prenyltransferase gene from Sophora flavescens, SfN8DT-1, responsible for the prenylation of the flavonoid naringenin at the 8-position, which is specific for flavanones and dimethylallyl diphosphate as substrates. Phylogenetic analysis shows that SfN8DT-1 has the same evolutionary origin as prenyltransferases for vitamin E and plastoquinone. The gene expression of SfN8DT-1 is strictly limited to the root bark where prenylated flavonoids are solely accumulated in planta. The ectopic expression of SfN8DT-1 in Arabidopsis thaliana resulted in the formation of prenylated apigenin, quercetin, and kaempferol, as well as 8-prenylnaringenin. SfN8DT-1 represents the first flavonoid-specific prenyltransferase identified in plants and paves the way for the identification and characterization of further genes responsible for the production of this large and important class of secondary metabolites.