The oleoresin secreted by grand fir (Abies grandis) is composed of resin acids derived largely from the abietane family of diterpene olefins as precursors which undergo subsequent oxidation of the C18-methyl group to a carboxyl function, for example, in the conversion of abieta-7,13-diene to abietic acid. A cDNA encoding abietadiene synthase has been isolated from grand fir and the heterologously expressed bifunctional enzyme shown to catalyze both the protonation-initiated cyclization of geranylgeranyl diphosphate to the intermediate (+)-copalyl diphosphate and the ionization-dependent cyclization of (+)-copalyl diphosphate, via a pimarenyl intermediate, to the olefin end products. Abietadiene synthase is translated as a preprotein bearing an N-terminal plastidial targeting sequence, and this form of the recombinant protein expressed in Escherichia coli proved to be unsuitable for detailed structure-function studies. Since the transit peptide-mature protein cleavage site could not be determined directly, a truncation series was constructed to delete the targeting sequence and prepare a "pseudomature" form of the enzyme that resembled the native abietadiene synthase in kinetic properties. Both the native synthase and the pseudomature synthase having 84 residues deleted from the preprotein converted geranylgeranyl diphosphate and the intermediate (+)-copalyl diphosphate to a nearly equal mixture of abietadiene, levopimaradiene, and neoabietadiene, as well as to three minor products, indicating that this single enzyme accounts for production of all of the resin acid precursors of grand fir. Kinetic evaluation of abietadiene synthase with geranylgeranyl diphosphate and (+)-copalyl diphosphate provided evidence for two functionally distinct active sites, the first for the cyclization of geranylgeranyl diphosphate to (+)-copalyl diphosphate and the second for the cyclization of (+)-copalyl diphosphate to diterpene end products, and demonstrated that the rate-limiting step of the coupled reaction sequence resides in the second cyclization process. The structural implications of these findings are discussed in the context of primary sequence elements considered to be responsible for binding the substrate and intermediate and for initiating the respective cyclization steps.