The linker protein L(CM) (ApcE) is postulated as the major component of the phycobilisome terminal energy acceptor (TEA) transferring excitation energy from the phycobilisome to photosystem II. L(CM) is the only phycobilin-attached linker protein in the cyanobacterial phycobilisome through auto-chromophorylation. However, the underlying mechanism for the auto-chromophorylation of L(CM) and the detailed molecular architecture of TEA is still unclear. Here, we demonstrate that the N-terminal phycobiliprotein-like domain of L(CM) (Pfam00502, LP502) can specifically recognize phycocyanobilin (PCB) by itself. Biochemical assays indicated that PCB binds into the same pocket in LP502 as that in the allophycocyanin α-subunit and that Ser152 and Asp155 play a vital role in LP502 auto-chromophorylation. By carefully conducting computational simulations, we arrived at a rational model of the PCB-LP502 complex structure that was supported by extensive mutational studies. In the PCB-LP502 complex, PCB binds into a deep pocket of LP502 with a distorted conformation, and Ser152 and Asp155 form several hydrogen bonds to PCB fixing the PCB Ring A and Ring D. Finally, based on our results, the dipoles and dipole-dipole interactions in TEA are analysed and a molecular structure for TEA is proposed, which gives new insights into the energy transformation mechanism of cyanobacterial phycobilisome.