On the basis of extensive first-principle calculations within the framework of quantum mechanics/molecular mechanics (QM/MM), a conclusive mechanism for the formation of the signaling state of blue light using flavin (BLUF) domain proteins is proposed which is compatible with the experimental data presently available. Time-dependent density functional, as well as advanced coupled cluster response theory was employed for the QM part in order to describe the relevant excited states. One of the key residues involved in the mechanism is the glutamine adjacent to the flavin chromophore. The reaction cascade, triggered by the initial photoexcitation of the flavin chromophore, involves isomerization of this residue but no rotation as assumed previously. The fact that only the environment, but not the flavin chromophore by itself, is chemically transformed along the individual steps of the mechanism is unique for biological photoreceptors. The final isomer of the glutamine tautomer, i.e., the imidic acid, is further stabilized by the interchange of a methionine residue in the binding pocket with a tryptophan residue. The flip of these two residues might be the trigger for the large conformational change of this protein which is consequently transmitted as the signal to the biological environment.