Plant class III peroxidases (POXs) take part in the formation of lignin and maturation of plant cell walls. However, only a few examples of such peroxidases from gymnosperm tree species with highly lignified xylem tracheids have been implicated so far. We report here cDNA cloning of three xylem-expressed class III peroxidase encoding genes from Norway spruce (Picea abies). The translated proteins, PX1, PX2 and PX3, contain the conserved amino acids required for heme-binding and peroxidase catalysis. They all begin with putative secretion signal propeptide sequences but diverge substantially at phylogenetic level, grouping to two subclusters when aligned with other class III plant peroxidases. In situ hybridization analysis on expression of the three POXs in Norway spruce seedlings showed that mRNA coding for PX1 and PX2 accumulated in the cytoplasm of young, developing tracheids within the current growth ring where lignification is occurring. Function of the putative N-terminal secretion signal peptides for PX1, PX2 and PX3 was confirmed by constructing chimeric fusions with EGFP (enhanced green fluorescent protein) and expressing them in tobacco protoplasts. Full-length coding region of px1 was also heterologously expressed in Catharanthus roseus hairy root cultures. Thus, at least the spruce PX1 peroxidase is processed via the endoplasmic reticulum (ER) most likely for secretion to the cell wall. Thereby, PX1 displays correct spatiotemporal localization for participation in the maturation of the spruce tracheid secondary cell wall.