Leguminous plants are able to establish a nitrogen-fixing symbiosis with soil bacteria generally known as rhizobia. Metabolites exuded by the plant root activate the production of a rhizobial signal molecule, the Nod factor, which is essential for symbiotic nodule development. This lipo-chitooligosaccharide signal is active at femtomolar concentrations, and its structure is correlated with host specificity of symbiosis, suggesting the involvement of a cognate perception system in the plant host. Here we describe the cloning of a gene from Medicago sativa that is essential for Nod-factor perception in alfalfa, and by genetic analogy, in the related legumes Medicago truncatula and Pisum sativum. The identified 'nodulation receptor kinase', NORK, is predicted to function in the Nod-factor perception/transduction system (the NORK system) that initiates a signal cascade leading to nodulation. The family of 'NORK extracellular-sequence-like' (NSL) genes is broadly distributed in the plant kingdom, although their biological function has not been previously ascribed. We suggest that during the evolution of symbiosis an ancestral NSL system was co-opted for transduction of an external ligand, the rhizobial Nod factor, leading to development of the symbiotic root nodule.