Aureusidin synthase, a polyphenol oxidase (PPO), specifically catalyzes the oxidative formation of aurones from chalcones, which are plant flavonoids, and is responsible for the yellow coloration of snapdragon (Antirrhinum majus) flowers. All known PPOs have been found to be localized in plastids, whereas flavonoid biosynthesis is thought to take place in the cytoplasm [or on the cytoplasmic surface of the endoplasmic reticulum (ER)]. However, the primary structural characteristics of aureusidin synthase and some of its molecular properties argue against localization of the enzyme in plastids and the cytoplasm. In this study, the subcellular localization of the enzyme in petal cells of the yellow snapdragon was investigated. Sucrose-density gradient and differential centrifugation analyses suggested that the enzyme (the 39-kDa mature form) is not located in plastids or on the ER. Transient assays using a green fluorescent protein (GFP) chimera fused with the putative propeptide of the PPO precursor suggested that the enzyme was localized within the vacuole lumen. We also found that the necessary information for vacuolar targeting of the PPO was encoded within the 53-residue N-terminal sequence (NTPP), but not in the C-terminal sequence of the precursor. NTPP-mediated ER-to-Golgi trafficking to vacuoles was confirmed by means of the co-expression of an NTPP-GFP chimera with a dominant negative mutant of the Arabidopsis GTPase Sar1 or with a monomeric red fluorescent protein (mRFP)-fused Golgi marker (an H+-translocating inorganic pyrophosphatase of Arabidopsis). We identified a sequence-specific vacuolar sorting determinant in the NTPP of the precursor. We have demonstrated the biosynthesis of a flavonoid skeleton in vacuoles. The findings of this metabolic compartmentation may provide a strategy for overcoming the biochemical instability of the precursor chalcones in the cytoplasm, thus leading to the efficient accumulation of aurones in the flower.