Magnolia grandiflora (Southern Magnolia) is a primitive evergreen tree that has attracted attention because of its horticultural distinctiveness, the wealth of natural products associated with it, and its evolutionary position as a basal angiosperm. Three cDNAs corresponding to terpene synthase (TPS) genes expressed in young leaves were isolated, and the corresponding enzymes were functionally characterized in vitro. Recombinant Mg25 converted farnesyl diphosphate (C(15)) predominantly to beta-cubebene, while Mg17 converted geranyl diphosphate (C(5)) to alpha-terpineol. Efforts to functionally characterize Mg11 were unsuccessful. Transcript levels for all three genes were prominent in young leaf tissue and significantly elevated for Mg25 and Mg11 messenger RNAs in stamens. A putative amino-terminal signal peptide of Mg17 targeted the reporter green fluorescent protein to both chloroplasts and mitochondria when transiently expressed in epidermal cells of Nicotiana tabacum leaves. Phylogenetic analyses indicated that Mg25 and Mg11 belonged to the angiosperm sesquiterpene synthase subclass TPS-a, while Mg17 aligned more closely to the angiosperm monoterpene synthase subclass TPS-b. Unexpectedly, the intron-exon organizations for the three Magnolia TPS genes were different from one another and from other well-characterized TPS gene sets. The Mg17 gene consists of six introns arranged in a manner similar to many other angiosperm sesquiterpene synthases, but Mg11 contains only four introns, and Mg25 has only a single intron located near the 5' terminus of the gene. Our results suggest that the structural diversity observed in the Magnolia TPS genes could have occurred either by a rapid loss of introns from a common ancestor TPS gene or by a gain of introns into an intron-deficient progenote TPS gene.