Tobacco (Nicotiana tabacum L.) is a natural allotetraploid derived from the interspecific hybridization between ancestral Nicotiana sylvestris and Nicotiana tomentosiformis. The majority of cultivated tobacco differs from both of its progenitor species in that tobacco typically contains nicotine as the primary alkaloid, in contrast to its two progenitors that accumulate nornicotine in the senescing leaves. However, most, if not all, tobacco cultivars possess an unstable mutation, commonly referred to as the conversion locus, that when activated mediates the conversion of a large percentage of nicotine to nornicotine in the senescing leaf. We have recently identified CYP82E4, a tobacco nicotine N-demethylase gene whose expression was highly induced during senescence in plants that have converted, and CYP82E3, a closely related homolog that exhibited no nicotine N-demethylase activity. In this study, domain swapping and site-directed mutagenesis studies identified a single amino acid change that fully restored nicotine N-demethylase activity to CYP82E3. An examination of the N. tomentosiformis orthologs of CYP82E3 and CYP82E4 revealed that both are functional nicotine N-demethylase genes in N. tomentosiformis. Collectively, our results suggest that a single base pair mutation in CYP82E3 and transcriptional suppression of CYP82E4 played important roles in the evolution of the alkaloid profile characteristic of modern tobacco.