SHMT (serine hydroxymethyltransferase; EC 220.127.116.11) catalyses reversible hydroxymethyl group transfer from serine to H4PteGlun (tetrahydrofolate), yielding glycine and 5,10-methylenetetrahydrofolate. In plastids, SHMTs are thought to catalytically direct the hydroxymethyl moiety of serine into the metabolic network of H4PteGlun-bound one-carbon units. Genes encoding putative plastid SHMTs were found in the genomes of various plant species. SHMT activity was detected in chloroplasts in pea (Pisum sativum) and barley (Hordeum vulgare), suggesting that plastid SHMTs exist in all flowering plants. The Arabidopsis thaliana genome encodes one putative plastid SHMT (AtSHMT3). Its cDNA was cloned by reverse transcription-PCR and the encoded recombinant protein was produced in Escherichia coli. Evidence that AtSHMT3 is targeted to plastids was found by confocal microscopy of A. thaliana protoplasts transformed with proteins fused to enhanced green fluorescent protein. Characterization of recombinant AtSHMT3 revealed that substrate affinity for and the catalytic efficiency of H4PteGlu1-8 increase with n, and that H4PteGlu1-8 inhibit AtSHMT3. 5-Methyltetrahydrofolate and 5-formyltetrahydrofolate with one and five glutamate residues inhibited AtSHMT3-catalysed hydroxymethyl group transfer from serine to H4PteGlu6, with the pentaglutamylated inhibitors being more effective. Calculations revealed inhibition with 5-methyltetrahydrofolate or 5-formyltetrahydrofolate resulting in little reduction in AtSHMT3 activity under folate concentrations estimated for plastids.