Petunia flower petals emit large amounts of isoeugenol, which has been shown to be synthesized by isoeugenol synthase (PhIGS1) from an ester of coniferyl alcohol, hypothesized to be coniferyl acetate. This paper describes the identification and characterization of a novel petunia gene encoding an enzyme belonging to the BAHD acyltransferase family whose expression correlates with isoeugenol biosynthesis. RNAi suppression of this gene results in inhibition of isoeugenol biosynthesis. Biochemical characterization of the protein encoded by this gene showed that it has acetyltransferase activity and is most efficient with coniferyl alcohol among the alcohol substrates tested. Overall, these data support the conclusion that coniferyl acetate is the substrate of isoeugenol synthase.