The D1 reaction center protein of the Photosystem II complex in green plants is synthesized with a short carboxyl-terminal extension. Proteolytic cleavage and removal of this extension peptide in the thylakoid lumen are necessary for the assembly of a manganese cluster that is essential for the oxygen evolution activity of Photosystem II. We have isolated cDNAs encoding CtpA, the carboxyl-terminal processing protease for the D1 protein, from two higher plants, spinach and barley. In each of these organisms, CtpA is encoded by a single copy nuclear gene, and its steady-state mRNA levels are light-regulated. The CtpA protein is detectable in etiolated material, and its level increases approximately 5-fold upon illumination. Moreover, the CtpA gene is expressed in shoot tissues and not in roots. In its precursor form, the CtpA protein harbors a bipartite transit sequence characteristic for thylakoid lumenal proteins. Cell fractionation studies demonstrated that CtpA is associated with thylakoid membranes and is resistant to treatments with thermolysin, consistent with its localization in the lumen of thylakoids. Comparisons of the sequence of the higher plant CtpA enzyme with those of other related carboxyl-terminal processing proteases suggest that these proteins constitute a new family of proteases.