Mg-protoporphyrin IX chelatase catalyzes insertion of the magnesium ion into protoporphyrin IX, the last common intermediate precursor in chlorophyll and heme biosynthesis, to form Mg-protoporphyrin IX. In Rhodobacter sphaeroides, and Synechocystis, the three open reading frames bchD/chID, bchH/chIH and bchI/chII encode proteins which are required for in vitro Mg-chelatase activity. In higher plants also, three proteins are necessary for the Mg chelation, and genes homologous to bchH and bchI have been isolated previously. In this study, a novel tobacco cDNA sequence homologous to bchD is isolated and initially characterized. Together with the tobacco clones encoding the other two subunits, full-length cDNAs are now available for the first time for all three subunits of one plant species. The CHL D polypeptide deduced from the open reading frame encodes a protein of 758 aa (82.9 kDa) with an amino terminal extension that resembles a plastid transit peptide. Sequence comparison of tobacco CHL D revealed similarities to the D subunit of Rhodobacter and Synechocystis of 44% and 75%. The amino terminal half of CHL D shows significant similarity (46%) to the entire CHL I peptide sequence, indicating a gene duplication from an ancestral gene. The carboxy terminal half seemed to be unique. Both parts of CHL D are linked with a glutamine/asparagine/proline-rich region flanked by a highly acid-rich segment. Protein-protein interaction among the three subunits CHL D, H and I was studied using the yeast two-hybrid system. Physical interaction was demonstrated between CHL D and CHL I indicating that CHL D is part of the Mg-chelatase. Heterodimer formation of CHL H with CHL I or CHL D could not be demonstrated by transactivation of the lacZ reporter gene. Homodimerization of the CHL D subunit was indicated in the more sensitive assay on X-Gal-containing agar plates. In vitro Mg2+ insertion into protoporphyrin IX was demonstrated in protein extracts of yeast strains expressing the three subunits of tobacco Mg-chelatase. The reconstitution of the recombinant enzyme activity required additional ATP.