Plays a role in tetrahydrobiopterin biosynthesis which is a co-factor for amino acid hydroxylases. May prevent both the formation of 7-pterins and accelerate the formation of quinonoid-BH2 (By similarity). Regulates the dimerization of homeodomain protein HNF1A and enhances its transcriptional activity (PubMed:11980910). Also acts as a coactivator for HNF1B-dependent transcription (PubMed:33749890). {ECO:0000250|UniProtKB:Q9CZL5, ECO:0000269|PubMed:11980910, ECO:0000269|PubMed:33749890}. This is the function of PCBD2 (pterin-4 alpha-carbinolamine dehydratase 2, ENSG00000132570).