Phenylalanine is hydroxylated at para position by phenylalanine hydroxylase to produce tyrosine. This is an irreversible reaction and requires the participation of a specific coenzyme biopterin. The active forms of biopterin is tetrahydrobiopterin, in the reaction it is converted to dihydrobiopterin. In the phenylalanine hydroxylase reaction, tetrahydrobiopterin. Tetrahydrobiopterin is then regenerated by an NADPH-dependent dihydrobiopterin reductase.

The enzyme phenylalanine hydroxylase is present in liver. In the conversion of phenylalanine to tyrosine, the reaction involves the incorporation of one atom of molecular oxygen (O₂) into the para position of phenylalanine while the other atom of O₂ is reduced to form water. It is the tetrahydrobiopterin that supplies the reducing equivalents, which, in turn, are provided by NADPH.