Tetrahydrobiopterin (BH₄) cofactor is essential for various processes, and is present in probably every cell or tissue of higher organisms. BH₄ is required for various enzyme activities, and for less defined functions at the cellular level. The pathway for the de novo biosynthesis of BH₄ from GTP involves GTP cyclohydrolase I, 6-pyruvoyl-tetrahydropterin synthase and sepiapterin reductase. Cofactor regeneration requires pterin-4a-carbinolamine dehydratase and dihydropteridine reductase. Based on gene cloning, recombinant expression, mutagenesis studies, structural analysis of crystals and NMR studies, reaction mechanisms for the biosynthetic and recycling enzymes were proposed. With regard to the regulation of cofactor biosynthesis, the major controlling point is GTP cyclohydrolase I, the expression of which may be under the control of cytokine induction. In the liver at least, activity is inhibited by BH₄, but stimulated by phenylalanine through the GTP cyclohydrolase I feedback regulatory protein. The enzymes that depend on BH₄ are the phenylalanine, tyrosine and tryptophan hydroxylases, the latter two being the rate-limiting enzymes for catecholamine and 5-hydroxytryptamine (serotonin) biosynthesis, all NO synthase isoforms and the glyceryl-ether mono-oxygenase. On a cellular level, BH₄ has been found to be a growth or proliferation factor for Crithidia fasciculata, haemopoietic cells and various mammalian cell lines. In the nervous system, BH₄ is a self-protecting factor for NO, or a general neuroprotecting factor via the NO synthase pathway, and has neurotransmitter-releasing function. With regard to human disease, BH₄ deficiency due to autosomal recessive mutations in all enzymes (except sepiapterin reductase) have been described as a cause of hyperphenylalaninaemia. Furthermore, several neurological diseases, including Dopa-responsive dystonia, but also Alzheimer's disease, Parkinson's disease, autism and depression, have been suggested to be a consequence of restricted cofactor availability.