Diphthamide, the target of diphtheria toxin, is a unique posttranslational modification on translation elongation factor 2 (EF2) in archaea and eukaryotes. The biosynthesis of diphthamide was proposed to involve three steps. The first step is the transfer of the 3-amino-3-carboxypropyl group from S-adenosyl-l-methionine (SAM) to the histidine residue of EF2, forming a C-C bond. Previous genetic studies showed this step requires four proteins in eukaryotes, Dph1-Dph4. However, the exact molecular functions for the four proteins are unknown. Previous study showed that Pyrococcus horikoshii Dph2 (PhDph2), a novel iron-sulfur cluster-containing enzyme, forms a homodimer and is sufficient for the first step of diphthamide biosynthesis in vitro. Here we demonstrate by in vitro reconstitution that yeast Dph1 and Dph2 form a complex (Dph1-Dph2) that is equivalent to the homodimer of PhDph2 and is sufficient to catalyze the first step in vitro in the presence of dithionite as the reductant. We further demonstrate that yeast Dph3 (also known as KTI11), a CSL-type zinc finger protein, can bind iron and in the reduced state can serve as an electron donor to reduce the Fe-S cluster in Dph1-Dph2. Our study thus firmly establishes the functions for three of the proteins involved in eukaryotic diphthamide biosynthesis. For most radical SAM enzymes in bacteria, flavodoxins and flavodoxin reductases are believed to serve as electron donors for the Fe-S clusters. The finding that Dph3 is an electron donor for the Fe-S clusters in Dph1-Dph2 is thus interesting and opens up new avenues of research on electron transfer to Fe-S proteins in eukaryotic cells.