Abstract The ATP-dependent cleavage of urea, catalyzed by urea amidolyase, occurs in two steps: (a) urea + ATP + HCO3- (Mg++, K+)/⇌ allophanate + ADP + Pi; and (b) allophanate → 2 HCO3- + 2 NH4+. The enzyme, purified approximately 150-fold from extracts of Candida utilis, contains high levels of covalently bound biotin and is very sensitive to inhibition by avidin. Furthermore, under controlled conditions, [14C]biotin is incorporated covalently into the enzyme when its formation is induced. The biotin-free apoenzyme of urea amidolyase has been isolated from Saccharomyces cerevisiae grown under biotin-deficient conditions. This apoenzyme catalyzes the hydrolysis of allophanate but does not catalyze the net cleavage of urea. The in vitro conversion of the apoenzyme to the holoenzyme requires ATP, Mg++ ions, d-biotin, and a low molecular weight holoenzyme synthetase from S. cerevisiae. Chemically prepared d-biotinyl 5'-adenylate will substitute for d-biotin and ATP in this process.