Cinnamic acid 4-hydroxylase (C4H), a member of the cytochrome P450 monooxygenase superfamily, plays a central role in phenylpropanoid metabolism and lignin biosynthesis and possibly anchors a phenylpropanoid enzyme complex to the endoplasmic reticulum (ER). A full-length cDNA encoding C4H was isolated from a hybrid poplar (Populus trichocarpa x P. deltoides) young leaf cDNA library. RNA-blot analysis detected C4H transcripts in all organs tested, but the gene was most highly expressed in developing xylem. C4H expression was also strongly induced by elicitor-treatment in poplar cell cultures. To verify the catalytic activity of the putative C4H cDNA, two constructs, C4H and C4H fused to the FLAG epitope (C4H::FLAG), were expressed in yeast. Immunoblot analysis showed that C4H was present in the microsomal fraction and microsomal preparations from strains expressing both enzymes efficiently converted cinnamic acid to p-coumaric acid with high specific activities. To investigate the subcellular localization of C4H in vivo, a chimeric C4H-green fluorescent protein (GFP) gene was engineered and stably expressed in Arabidopsis. Confocal laser microscopy analysis clearly showed that in Arabidopsis the C4H::GFP chimeric enzyme was localized to the ER. When expressed in yeast, the C4H::GFP fusion enzyme was also active but displayed significantly lower specific activity than either C4H or C4H::FLAG in in vitro and in vivo enzyme assays. These data definitively show that C4H is localized to the ER in planta.