Benzalacetone synthase (BAS) and chalcone synthase (CHS) are plant-specific type III polyketide synthases (PKSs) that share approximately 70% amino acid sequence identity. BAS catalyzes a one-step decarboxylative condensation of 4-coumaroyl-CoA with malonyl-CoA to produce a diketide benzalacetone, whereas CHS performs sequential condensations with three malonyl-CoA to generate a tetraketide chalcone. A homology model suggested that BAS has the same overall fold as CHS with cavity volume almost as large as that of CHS. One of the most characteristic features is that Rheum palmatum BAS lacks active site Phe-215; the residues 214LF conserved in type III PKSs are uniquely replaced by IL. Our observation that the BAS I214L/L215F mutant exhibited chalcone-forming activity in a pH-dependent manner supported a hypothesis that the absence of Phe-215 in BAS accounts for the interruption of the polyketide chain elongation at the diketide stage. On the other hand, Phe-215 mutants of Scutellaria baicalensis CHS (L214I/F215L, F215W, F215Y, F215S, F215A, F215H, and F215C) afforded increased levels of truncated products; however, none of them generated benzalacetone. These results confirmed the critical role of Phe-215 in the polyketide formation reactions and provided structural basis for understanding the structure-function relationship of the plant type III PKSs.