A bacterial thermostable cellulase, the endo-1,4-beta-D-glucanase E1 from Acidothermus cellulolyticus, was imported into chloroplasts, and an active enzyme was recovered both in vitro and in vivo. Precursor fusion proteins were synthesized with E1 or its catalytic domain, CD, fused to the transit peptide of ferredoxin or ribulose-bisphosphate carboxylase activase for stromal targeting. A spacer region of 1, 5 or 15 amino acids was included carboxy to the transit peptide. The efficiency of import and processing by the stromal processing peptidase depended on the nature of the transit peptide and the passenger protein, and increased with the length of the spacer between them. Besides finding E1 or CD in the stroma, protein was arrested in the envelope during import showing that structural features of E1 and CD, along with their proximity to the transit peptide, influence translocation. The cellulose binding domain and/or serine/proline/threoline-rich linker of E1 may impede efficient import. Significantly, most precursors for E1 and CD synthesized by in vitro translation possessed endoglucanse activity that was temperature-dependent, and required the residues AGGGY at the N-terminus of E1 and CD. Furthermore, activity was detected upon import into chloroplasts. Based on the in vitro analyses, five precursor fusion proteins were selected to determine if E1 and CD would be successfully targeted to chloroplasts in vivo. In transgenic tobacco plants, E1 and CD accumulated in both the stromal and membrane fractions and, importantly, chloroplast extracts showed endoglucanase activity.