Tzs and ipt are two Ti plasmid genes coding for proteins with isopentenyltransferase (IPT) activity in vitro. We cloned both genes for protein expression in Escherichia coli and in Agrobacterium tumefaciens, and we investigated differences between the two genes by analysing the properties of the proteins in vitro and in vivo. In vitro, extracts with tzs or ipt-coded proteins had high IPT activity, and the enzymes were identical in most properties. The most important difference was detected in vivo: the tzs-encoded protein was very active in cytokinin production, while the ipt protein required overexpression in order to obtain measurable activity in bacteria. In both cases, rans-zeatin was the major product of the gene activity. Formation of this cytokinin requires a hydroxylase function in addition to the IPT reaction. No such activity could be ascribed to tzs or ipt-encoded proteins in vitro or in vivo, but cytokinin hydroxylase activity was detected in cells and extracts of E. coli, regardless of the presence or absence of the cytokinin genes. Based on these results it is proposed that both genes code for a single enzyme activity (isopentenyltransferase), that the genes and proteins are adapted for function either in bacteria (tzs) or in transformed plant cells (ipt), and that in both prokaryotic and eukaryotic cells hydroxylation to trans-zeatin is a function contributed by host enzymes.