Phosphorus (P) deficiency in soil is a major constraint for agricultural production worldwide. Despite this, most soils contain significant amounts of total soil P that occurs in inorganic and organic fractions and accumulates with phosphorus fertilization. A major component of soil organic phosphorus occurs as phytate. We show that when grown in agar under sterile conditions, Arabidopsis thaliana plants are able to obtain phosphorus from a range of organic phosphorus substrates that would be expected to occur in soil, but have only limited ability to obtain phosphorus directly from phytate. In wild-type plants, phytase constituted less than 0.8% of the total acid phosphomonoesterase activity of root extracts and was not detectable as an extracellular enzyme. By comparison, the growth and phosphorus nutrition of Arabidopsis plants supplied with phytate was improved significantly when the phytase gene (phyA) from Aspergillus niger was introduced. The Aspergillus phytase was only effective when secreted as an extracellular enzyme by inclusion of the signal peptide sequence from the carrot extensin (ex) gene. A 20-fold increase in total root phytase activity in transgenic lines expressing ex::phyA resulted in improved phosphorus nutrition, such that the growth and phosphorus content of the plants was equivalent to control plants supplied with inorganic phosphate. These results show that extracellular phytase activity of plant roots is a significant factor in the utilization of phosphorus from phytate and indicate that opportunity exists for using gene technology to improve the ability of plants to utilize accumulated forms of soil organic phosphorus.