Phytopathogenic fungi such as the rice blast fungus Magnaporthe grisea are unique in having two catalase/peroxidase (KatG) paralogues located either intracellularly (KatG1) or extracellularly (KatG2). The coding genes have recently been shown to derive from a lateral gene transfer from a (proteo)bacterial genome followed by gene duplication and diversification. Here we demonstrate that KatG1 is expressed constitutively in M. grisea. It is the first eukaryotic catalase/peroxidase to be expressed heterologously in Escherichia coli in high amounts, with high purity and with almost 100% haem occupancy. Recombinant MagKatG1 is an acidic, mainly homodimeric, oxidoreductase with a predominant five-co-ordinated high-spin haem b. At 25 degrees C and pH 7.0, the E(0)' (standard reduction potential) of the Fe(III)/Fe(II) couple was found to be -186+/-10 mV. It bound cyanide monophasically with an apparent bimolecular rate constant of (9.0+/-0.4)x10(5) M(-1).s(-1) at pH 7.0 and at 25 degrees C and with a K(d) value of 1.5 muM. Its predominantly catalase activity was characterized by a pH optimum at 6.0 and k(cat) and K(m) values of 7010 s(-1) and 4.8 mM respectively. In addition, it acts as a versatile peroxidase with a pH optimum in the range 5.0-5.5 using both one-electron [2,2'-azinobis-(3-ethylbenzothiazoline-6-sulfonic acid) o-dianisidine, pyrogallol or guaiacol] and two-electron (Br(-), I(-) or ethanol) donors. Structure-function relationships are discussed with respect to data reported for prokaryotic KatGs, as is the physiological role of MagKatG1. Phylogenetic analysis suggests that (intracellular) MagKatG1 can be regarded as a typical representative for catalase/peroxidase of both phytopathogenic and saprotrophic fungi.