Eukaryotic proteins containing a CAAX (A is aliphatic amino acid) C-terminal tetrapeptide sequence generally undergo a lipid modification, the addition of a prenyl group. Proteins that are modified by prenylation, such as Ras GTPases, can be subsequently modified by a proteolytic event that removes a C-terminal tripeptide (AAX). Two distinct proteases have been identified that are involved in the CAAX proteolytic step, FACE-1/Ste24 and FACE-2/Rce1. These proteases have different enzymatic properties, substrate specificities, and biological functions. However, a proposal has been made that plants lack a FACE-2/Rce1-type protease. Here, we describe the isolation of a cDNA from Arabidopsis thaliana that encodes a 311-aa protein with characteristics that are similar to the FACE-2/Rce1 group of enzymes. Northern blot analysis demonstrates widespread expression of this gene in plant tissues. Heterologous expression of the A. thaliana cDNA in yeast restores CAAX proteolytic activity to yeast lacking native CAAX proteases. The recombinant protein produced in this system displays an in vivo substrate specificity profile distinct from AtSte24 and cleaves a farnesylated CAAX tetrapeptide in vitro. These results provide evidence for the existence of a previously unsuspected plant FACE-2/Rce1 ortholog and support the evolutionary conservation of dual CAAX proteolytic systems in eukaryotes.