The ascorbate-glutathione pathway plays a major role in the detoxification of reactive oxygen species (ROS) in vascular plants. One of the key enzymes in this pathway is monodehydroascorbate reductase (MDHAR), a FAD enzyme that catalyses the reduction of the monodehydroascorbate radical. To elucidate the evolution and functional role of MDHAR we identified and characterised MDHARs from the moss Physcomitrella patens. Expressed sequence tag (EST) databases containing approximately 100.000 ESTs from Physcomitrella were searched and three isoforms of monodehydroascorbate reductase (PpMDHAR1, PpMDHAR2 and PpMDHAR3) were identified. In vascular plants MDHAR is found in the cytosol, chloroplast, mitochondria and peroxisome. Surprisingly, all three PpMDHARs resembled the cytosolic isoforms from vascular plants lacking the NH(2)-terminal or COOH-terminal extension found in organelle targeted MDHARs. The number and position of introns was also conserved between PpMDHARs and cytosolic MDHARs from vascular plants. Phylogenetic analysis revealed that cytosolic MDHARs are monophyletic in origin and the ancestral gene evolved before the divergence of bryophytes more than 400 million years ago. Transcript analyses showed that expression of PpMdhar1 and PpMdhar3 was increased up to 5-fold under salt stress, osmotic stress or upon exposure to abscisic acid. In contrast, PpMdhar transcription levels were unchanged upon chilling, UV-B exposure or oxidative stress. The conservation of cytosolic MDHAR in the land-plant lineage and the transcriptional upregulation under water deficiency suggest that the evolution of cytosolic MDHAR played an essential role in stress protection for land plants when they inhabited the dry terrestrial environment.