The first specific reaction in the biosynthesis of isoflavonoid compounds in plants is the 2-hydroxylation, coupled to aryl migration, of a flavanone. Using a functional genomics approach, we have characterized a cDNA encoding a 2-hydroxyisoflavanone synthase from soybean (Glycine max). Microsomes isolated from insect cells expressing this cytochrome P450 from a baculovirus vector convert 4', 7-dihydroxyflavanone (liquiritigenin) to 4',7-dihydroxyisoflavone (daidzein), most likely via 2,4',7-trihydroxyisoflavanone which spontaneously dehydrates to daidzein. The enzyme also converts naringenin (4',5,7-trihydroxyflavanone) to genistein, but at a lower rate. 2-Hydroxyisoflavanone synthase transcripts are strongly induced in alfalfa cell suspensions in response to elicitation., (Copyright 1999 Academic Press.)