Betaine aldehyde dehydrogenase (BADH) catalyzes the last step in the plant biosynthetic pathway that leads to glycinebetaine. Rice plants (Oryza sativa L.), albeit considered a typical non-glycinebetaine accumulating species, have been found to express this enzyme at low levels. This observation evokes an interest in phylogenic evolution of the enzyme in the plant kingdom. It is reported here that rice plants possess the ability to take up exogenously added betaine aldehyde through the roots and convert it to glycinebetaine, resulting in an enhanced salt-tolerance of the plants. A gene encoding a putative BADH from the rice genome was also cloned and sequenced. The gene was found to contain 14 introns, and the overall nucleotide sequence of the coding region is c. 78% identical to that of the barley BADH cDNA. Cloning of a partial BADH cDNA from rice was accomplished by reverse transcription-polymerase chain reaction (RT-PCR). The nucleotide sequence of the cloned fragment was found to be identical to the corresponding exon regions of the rice genomic BADH gene. The deduced amino acid sequences of rice and barley BADH both contain a C-terminal tripeptide SKL, a signal known to target preproteins to microbodies. This localization was confirmed by an immuno-gold labeling study of transgenic tobacco harboring barley cDNA, which showed BADH protein inside peroxisomes. Northern blot analysis revealed that the level of BADH mRNA is salt-inducible.