A tissue print followed by a xyloglucan endotransglycosylase assay revealed that XET activity is present at sites of cell elongation in both roots and shoots of the lycopodiophyte Selaginella kraussiana. This paper provides the first report and analysis of a xyloglucan endotransglycosylase/hydrolase (XTH) cDNA sequence, isolated from a club moss. In silico analysis of the deduced amino acid sequence revealed a strong conservation of the XET-domain described in higher plants. The catalytic site (DEIDLEFLG) varies in only one amino acid compared with the consensus sequence and was shown to be functional after recombinant expression of Sk-XTH1 in Pichia pastoris. Sk-XTH1 displays xyloglucan endotransglycosylase activity over a broad pH (4.5-7.5) and temperature range (4-30 degrees C), but it shows no hydrolase activity. The catalytic site is followed by a consensus sequence for N-linked glycosylation. Four terminal cysteines were shown to stabilize a putative XET-C terminal extension region, which includes conserved amino acids, involved in the recognition and binding of the substrates. The N-linked sugar interactions as well as the disulphide bridges were shown to be necessary to perform XET activity. The presence of a highly conserved XTH sequence and function in a microphyllophyte suggests that XTHs were present before the divergence of lycopodiophytes and euphyllophytes. It also points to a possible key role for XTHs in the production of a cell wall that allowed the further evolution of land plants.