Cryptochromes (CRYs) are blue/UV-A photoreceptors related to the DNA repair enzyme DNA photolyase. They have been found in plants, animals and most recently in the cyanobacterium Synechocystis. Closely related to the Synechocystis cryptochrome is the Arabidopsis gene At5g24850. Here, we show that the encoded protein of At5g24850 binds flavin adenine dinucleotide (FAD). It has no photolyase activity, and is likely to function as a photoreceptor. We have named it At-cry3 to distinguish it from the other Arbabidopsis cryptochrome homologues At-cry1 and At-cry2. At-cry3 carries an N-terminal sequence, which mediates import into chloroplasts and mitochondria. Furthermore, we show that At-cry3 binds DNA. DNA binding was also demonstrated for the Synechocystis cryptochrome, indicating that both photoreceptors could have similar modes of action. Based on the finding of a new cryptochrome class in bacteria and plants, it has been suggested that cryptochromes evolved before the divergence of eukaryotes and prokaryotes. However, our phylogenetic analyses are also consistent with an alternative explanation that the presence of cryptochromes in the plant nuclear genome is the result of dual horizontal gene transfer. That is, CRY1 and CRY2 genes may originate from an endosymbiotic ancestor of modern-day alpha-proteobacteria, while the CRY3 gene may originate from an endosymbiotic ancestor of modern-day cyanobacteria.