In plants, 6-hydroxymethyl-7,8-dihydropterin pyrophosphokinase/7,8-dihydropteroate synthase (mitHPPK/DHPS) is a bifunctional mitochondrial enzyme, which catalyzes the first two consecutive steps of tetrahydrofolate biosynthesis. Mining the Arabidopsis genome data base has revealed a second gene encoding a protein that lacks a potential transit peptide, suggesting a cytosolic localization of the isoenzyme (cytHPPK/DHPS). When the N-terminal part of the cytHPPK/DHPS was fused to green fluorescent protein, the fusion protein appeared only in the cytosol, confirming the above prediction. Functionality of cytHPPK/DHPS was addressed by two parallel approaches: first, the cytHPPK/DHPS was able to rescue yeast mutants lacking corresponding activities; second, recombinant cytHPPK/DHPS expressed and purified from Escherichia coli displayed both HPPK and DHPS activities in vitro. In contrast to mitHPPK/DHPS, which was ubiquitously expressed, the cytHPPK/DHPS gene was exclusively expressed in reproductive tissue, more precisely in developing seeds as revealed by histochemical analysis of a transgenic cytHPPK/DHPS promoter-GUS line. In addition, it was observed that expression of cytHPPK/DHPS mRNA was induced by salt stress, suggesting a potential role of the enzyme in stress response. This was supported by the phenotype of a T-DNA insertion mutant in the cytHPPK/DHPS gene, resulting in lower germination rates as compared with the wild-type upon application of oxidative and osmotic stress.