An in vitro assay has been developed for determining prenyltransferase activity in larval corpora allata homogenates of the lepidopteran Manduca sexfa. Optimal activity was obtained by the addition of glycerol and bovine serum albumin. The prenyltransferase required either Mg2+ or Mn2+ for activity and was inhibited by N-ethylmaleimide, geranylgeranyl pyrophosphate, and higher concentrations of isopentenyl pyrophosphate (IPP). Because of the prenyltransferase's low sensitivity to phosphate, the addition of 100 m M phosphate could be used to selectively inhibit IPP isomerase, which otherwise remained active under our standard assay conditions. Efficient coupling of geranyl pyrophosphate with IPP to yield farnesyl pyrophosphate required the presence of a nonionic detergent, such as Triton X-100. Although the addition of up to 3% detergent resulted i n significant activity enhancement, the protein is not membrane-bound, as determined by enzyme localization studies. Preliminary studies using homologous substrates suggest that the lepidopteran enzyme has different substrate specificity than other known prenyltransferases. Competition studies using homodimethylallyl pyrophosphate (HDMAPP) and dimethylallyl pyrophosphate (DMAPP) indicated a 1.8:l preference for the ethyl-substituted substrate. Further examination of DMAPP and HDMAPP coupling patterns showed that this specificity is the result of higher discrimination in the first condensation step. These results suggest that lepidopteran prenyltransferase may regulate the proportions of the various juvenile hormone homologues that are biosynthesized within the corpora allata.