Fatty acids containing three-member carbocyclic rings are found in bacteria and plants. Bacteria synthesize cyclopropane fatty acids (CPA-FAs) only by the addition of a methylene group from S-adenosylmethionine to the cis-double bond of monoenoic phospholipid-bound fatty acids. In plants CPA-FAs are usually minor components with cyclopropene fatty acids (CPE-FAs) more abundant. Sterculia foetida seed oil contains 65–78% CPE-FAs, principally sterculic acid. To address carbocyclic fatty acid synthesis in plants, a cDNA library was constructed from developing seeds during the period of maximum oil deposition. About 0.4% of 5,300 expressed sequence tags were derived from one gene, which shared similarities to the bacterial CPA-FA synthase. However, the predicted protein is twice as large as the bacterial homolog and represents a fusion of an FAD-containing oxidase at the N terminus and a methyltransferase at the C terminus. Functional analysis of the isolated full-length cDNA was conducted in tobacco suspension cells where its expression resulted in the accumulation of up to 6.2% dihydrosterculate of total fatty acids. In addition, the dihydrosterculate was specifically labeled by [methyl-¹⁴C]methionine and by [¹⁴C]oleic acid in the transgenic tobacco cells. In in vitro assay of S. foetida seed extracts, S-adenosylmethionine served as a methylene donor for the synthesis of dihydrosterculate from oleate. Dihydrosterculate accumulated largely in phosphatidylcholine in both systems. Together, a CPA-FA synthase was identified from S. foetida, and the pathway in higher plants that produce carbocyclic fatty acids was defined as by transfer of C₁ units, most likely from S-adenosylmethionine to oleate.