Saxitoxin (STX) and its analogs are voltage-gated sodium-channel blockers that cause paralytic shellfish poisoning (PSP) and negatively affect human health and seafood industries worldwide. Little is known about the molecular biology of PSP-toxin synthesis. Saxitoxin precursors were identified 25 years ago, and a hypothetical biosynthesis pathway was proposed; however, the correct sequence of reactions and enzymes involved in their catalysis remains to be identified. This study describes the optimization of in vitro biosynthesis of PSP toxins by cellular lysates of the toxic cyanobacterium Cylindrospermopsis raciborskii (Wołosz.) Seenaya et Subbaraju T3 and the characterization of its biochemical requirements. Enzymes involved in PSP-toxin synthesis are located in the cytosol. The molecular components of in vitro biosynthesis reactions could not be completely defined because of the requirement of an unknown cofactor. Evidence is presented that supports the previous suggestion that STX biosynthesis involves a Claisen condensation between arginine and acetate. In addition, carbamoyl phosphate was identified as a likely precursor for carbamated PSP toxins. Predictions have been made regarding the enzymes that may be involved in the biosynthesis of PSP toxins. These included class II aminotransferase; nonheme iron oxygenase, containing flavin, and possibly ferredoxin, as the prosthetic groups; and an O-carbamoyltransferase. On the other hand, the involvement of cytochrome P450 monooxygenase was excluded.