The complexity of eukaryotic multicellular organisms relies on evolutionary developments that include compartmentalization, alternative splicing, protein domain fusion and post-translational modification. Mammalian gephyrin uniquely exemplifies these processes by combining two enzymatic functions within the biosynthesis of the Moco (molybdenum cofactor) in a multidomain protein. It also undergoes extensive alternative splicing, especially in neurons, where it also functions as a scaffold protein at inhibitory synapses. Two out of three gephyrin domains are homologous to bacterial Moco-synthetic proteins (G and E domain) while being fused by a third gephyrin-specific central C domain. In the present paper, we have established the in vitro Moco synthesis using purified components and demonstrated an over 300-fold increase in Moco synthesis for gephyrin compared with the isolated G domain, which synthesizes adenylylated molybdopterin, and E domain, which catalyses the metal insertion at physiological molybdate concentrations in an ATP-dependent manner. We show that the C domain impacts the catalytic efficacy of gephyrin, suggesting an important structural role in product substrate channelling as depicted by a structural model that is in line with a face-to-face orientation of both active sites. Our functional studies demonstrate the evolutionary advantage of domain fusion in metabolic-proteins, which can lead to the development of novel functions in higher eukaryotes.