The introduction of sulfa drugs for the chemotherapy of bacterial infections in 1935 revolutionized medicine. Although their mechanism of action is understood, the molecular bases for most of their side effects remain obscure. Here, we report that sulfamethoxazole and other sulfa drugs interfere with tetrahydrobiopterin biosynthesis through inhibition of sepiapterin reductase. Crystal structures of sepiapterin reductase with bound sulfa drugs reveal how structurally diverse sulfa drugs achieve specific inhibition of the enzyme. The effect of sulfa drugs on tetrahydrobiopterin-dependent neurotransmitter biosynthesis in cell-based assays provides a rationale for some of their central nervous system related side effects, particularly in high-dose sutfamethoxazole therapy of Pneumorystis pneumonia. Our findings reveal an unexpected aspect of the pharmacology of sulfa drugs and might translate into their improved medical use.