In previous work it has been shown that the route from indoleacetic acid (IAA) to indolebutyric acid (IBA) is likely to be a two‐step process with an unknown intermediate designated ‘product X′. Our objective was to characterize and purify enzyme activities that are involved in these reactions. Indole‐3‐butyric acid synthetase was isolated and characterized from light‐grown maize seedlings (Zea mays L.), which were able to synthesize IBA from indole‐3‐acetic acid (IAA) with ATP and acetyl‐CoA as cofactors. The enzyme activity is most likely located on the membranes of the endoplasmic reticulum, as shown by means of aqueous two‐phase partitioning and sucrose density gradient centrifugation, with subsequent marker enzyme analysis. It was possible to solubilize the enzyme from the membranes with a detergent (CHAPS) and high concentrations of NaCl. The molecular mass of solubilized IBA synthetase was ca 31 kDa and its isoelectric point was at pH 4.8. The enzyme forming the reaction intermediate had a molecular mass of only 20 kDa and it seemed to be located on different membranes. Inhibition experiments with reducing agents and sulfhydryl reagents indicated that no sulfhydryl groups or disulfide bridges were present in the active centre of IBA synthetase. KCN inhibited the enzyme activity completely, and sodium azide by about 50%. Substrate analogs. such as 1‐IAA, 2,4‐dichlorophenoxyacetic acid, phenylacetic acid, and naphthaleneacetic acid, inhibited IBA formation to a high extent. Experiments with tunicamycin gave evidence that the enzyme is not a glycoprotein. These findings were confirmed by affinity chromatography with Concanavalin A. where the enzyme did not bind to the matrix. Further purification of the IBA synthetase on an ATP‐affinity column resulted in a more than 1 000‐fold purification compared to the microsomal membranes. IBA synthetase activity was also present in other plant families. Our results present further evidence that IBA is synthesized by a two‐step mechanism involving two different enzyme activities.