Phycoerythrin (PE) is a green light-absorbing protein present in the light-harvesting complex of cyanobacteria and red algae. The spectral characteristics of PE are due to its prosthetic groups, or phycoerythrobilins (PEBs), that are covalently attached to the protein chain by specific bilin lyases. Only two PE lyases have been identified and characterized so far, and the other bilin lyases are unknown. Here, using in silico analyses, markerless deletion, biochemical assays with purified and recombinant proteins, and site-directed mutagenesis, we examined the role of a putative lyase-encoding gene, cpeF, in the cyanobacterium Fremyella diplosiphon. Analyzing the phenotype of the cpeF deletion, we found that cpeF is required for proper PE biogenesis, specifically for ligation of the doubly linked PEB to Cys-48/Cys-59 residues of the CpeB subunit of PE. We also show that in a heterologous host, CpeF can attach PEB to Cys-48/Cys-59 of CpeB, but only in the presence of the chaperone-like protein CpeZ. Additionally, we report that CpeF likely ligates the A ring of PEB to Cys-48 prior to the attachment of the D ring to Cys-59. We conclude that CpeF is the bilin lyase responsible for attachment of the doubly ligated PEB to Cys-48/Cys-59 of CpeB and together with other specific bilin lyases contributes to the post-translational modification and assembly of PE into mature light-harvesting complexes.