The xanthine oxidase class of molybdenum enzyzmes requires a terminal sulfur ligand at the active site. It has been proposed that a special sulfurase catalyzes the insertion of this ligand thereby activating the enzymes. Previous analyses of mutants in plants indicated that the genetic locus aba3 is involved in this step leading to activation of the molybdenum enzymes aldehyde oxidase and xanthine dehydrogenase. Here we report the cloning of the aba3 gene from Arabidopsis thaliana and the biochemical characterization of the purified protein. ABA3 is a two-domain protein with a N-terminal NifS-like sulfurase domain and a C-terminal domain that might be involved in recognizing the target enzymes. Molecular analysis of three aba3 mutants identified mutations in both domains. ABA3 contains highly conserved binding motifs for pyridoxal phosphate and for a persulfide. The purified recombinant protein possesses a cysteine desulfurase activity, is yellow in color, and shows a NifS-like change in absorbance in the presence of L-cysteine. Pretreatment of ABA3 with a thiol-specific alkylating reagent inhibited its desulfurase activity. These data indicate a transsulfuration reaction similar to bacterial NifS. In a fully defined in vitro system, the purified protein was able to activate aldehyde oxidase by using L-cysteine as sulfur donor. Finally, we show that the expression of the aba3 gene is inducible by drought-stress.