The Arabidopsis mutant early in short days4 (esd4) shows extreme early flowering and alterations in shoot development. We have identified ESD4 and demonstrate that it encodes a nuclear protein located predominantly at the periphery of the nucleus. ESD4 contains a segment of >200 amino acids with strong similarity to yeast and animal proteases that are specific for the protein modifier SMALL UBIQUITIN-RELATED MODIFIER (SUMO). ESD4 shows a similar function to these proteases in vitro and processes the precursor of Arabidopsis SUMO (AtSUMO) to generate the mature form. This activity of ESD4 is prevented by mutations that affect the predicted active site of the protease or the cleavage site of the AtSUMO precursor. In yeast, these proteases also recycle SUMO from conjugates, and this appears to be the major role of ESD4 in vivo. This is suggested because esd4 mutants contain less free AtSUMO and more SUMO conjugates than wild-type plants, and a transgene expressing mature SUMO at high levels enhanced aspects of the esd4 phenotype. ESD4 defines an important role for protein modification by AtSUMO in the regulation of flowering.