Hydrilla verticillata has a facultative single-cell system that changes from C3 to C4 photosynthesis. A NADP+-dependent malic enzyme (NADP-ME) provides a high [CO2] for Rubisco fixation in the C4 leaf chloroplasts. Of three NADP-ME genes identified, only hvme1 was up-regulated in the C4 leaf, during the light period, and it possessed a putative transit peptide. Unlike obligate C4 species, H. verticillata exhibited only one plastidic isoform that may perform housekeeping functions, but is up-regulated as the photosynthetic decarboxylase. Of the two cytosolic forms, hvme2 and hvme3, the latter exhibited the greatest expression, but was not light-regulated. The mature isoform of hvme1 had a pI of 6.0 and a molecular mass of 64 kD, as did the recombinant rHVME1m, and it formed a tetramer in the chloroplast. The recombinant photosynthetic isoform showed intermediate characteristics between isoforms in terrestrial C3 and C4 species. The catalytic efficiency of rHVME1m was four-fold higher than the cytosolic rHVME3 and two-fold higher than recombinant cytosolic isoforms of rice, but lower than plastidic forms of maize. The Km (malate) of 0.6 mM for rHVME1 was higher than maize plastid isoforms, but four-fold lower than found with rice. A comprehensive phylogenetic analysis of 25 taxa suggested that chloroplastic NADP-ME isoforms arose from four duplication events, and hvme1 was derived from cytosolic hvme3. The chloroplastic eudicot sequences were a monophyletic group derived from a cytosolic clade after the eudicot and monocot lineages separated, while the monocots formed a polyphyletic group. The findings support the hypothesis that a NADP-ME isoform with specific and unusual regulatory properties facilitates the functioning of the single-cell C4 system in H. verticillata.