Cinnamoyl CoA:NADP oxidoreductase (CCR, EC 220.127.116.11) catalyzes the conversion of cinnamoyl CoA esters to their corresponding cinnamaldehydes, i.e. the first specific step in the synthesis of the lignin monomers. The cloning of a cDNA encoding CCR in Eucalyptus gunnii (EUCCR) is reported here. The identity of the EUCCR cDNA was demonstrated by comparison with peptide sequence data from purified CCR and functional expression of the recombinant enzyme in Escherichia coli. Sequence analysis revealed remarkable homologies with dihydroflavonol-4-reductase (DFR), the first enzyme of the anthocyanin biosynthetic pathway. Moreover, significant similarities were found with mammalian 3 beta-hydroxysteroid dehydrogenase and bacterial UDP-galactose-4-epimerase, suggesting that CCR shared a common ancestor with these enzymes and can therefore be considered as a new member of the mammalian 3 beta-hydroxysteroid dehydrogenase/ plant dihydroflavonol reductase superfamily. In Eucalyptus gunnii, CCR is encoded by one gene containing four introns whose positions are similar to those of introns I, II, III and V in DFR genes from dicots. In agreement with the involvement of CCR in lignification, the CCR transcript was shown to be expressed in lignified organs, i.e. root and stem tissues, and was localized mainly in young differentiating xylem. On the other hand, its abundance in Eucalyptus leaves suggests that monolignols may be precursors of end products other than lignins. This first characterization of a gene corresponding to CCR opens new possibilities to genetically engineer plants with lower lignin content. This is particularly important for woody plants such as Eucalyptus which are used for pulp making.