We used a series of in vitro-generated deletion and amino acid substitution derivatives of phytochrome B (phyB) expressed in transgenic Arabidopsis to identify regions of the molecule important for biological activity. Expression of the chromophore-bearing N-terminal domain of phyB alone resulted in a fully photoactive, monomeric molecule lacking normal regulatory activity. Expression of the C-terminal domain alone resulted in a photoinactive, dimeric molecule, also lacking normal activity. Thus, both domains are necessary, but neither is sufficient for phyB activity. Deletion of a small region on each major domain (residues 6 to 57 and 652 to 712, respectively) was shown to compromise phyB activity differentially without interfering with spectral activity or dimerization. Deletion of residues 6 to 57 caused a large increase in the fluence rate of continuous red light (Rc) required for maximal seedling responsiveness, indicating a marked decrease in efficiency of light signal perception or processing per mole of mutant phyB. In contrast, deletion of residues 652 to 712 resulted in a photoreceptor that retained saturation of seedling responsiveness to Rc at low fluence rates but at a response level much below the maximal response elicited by the parent molecule. This deletion apparently reduces the maximal biological activity per mole of phyB without a major decrease in efficiency of signal perception, thus suggesting disruption of a process downstream of signal perception. In addition, certain phyB constructs caused dominant negative interference with endogenous phyA activity in continuous far-red light, suggesting that the two photoreceptors may share reaction partners.