The photolyase/cryptochrome family is a large family of flavoproteins that encompasses DNA repair proteins, photolyases, and cryptochromes that regulate blue-light-dependent growth and development in plants, and light-dependent and light-independent circadian clock setting in animals. Phylogenetic analysis has revealed a new class of the family, named type III photolyase, which cosegregates with plant cryptochromes. Here we describe the isolation and characterization of a type III photolyase from Caulobacter crescentus. Spectroscopic analysis shows that the enzyme contains both the methenyl tetrahydrofolate photoantenna and the FAD catalytic cofactor. Biochemical analysis shows that it is a bona fide photolyase that repairs cyclobutane pyrimidine dimers. Mutation of an active site Trp to Arg disrupts FAD binding with no measurable effect on MTHF binding. Using enzyme preparations that contain either both chromophores or only folate, we were able to determine the efficiency and rate of transfer of energy from MTHF to FAD.