Medium-chain fatty acids (FAs), found in storage lipids of certain plants, are an important renewable resource. Seeds of undomesticated California bay accumulate laurate (12:0), and a 12:0-acyl-carrier protein thioesterase (BTE) has been purified from this tissue. Sequencing of BTE enabled the cloning of a complementary DNA coding for a plastid-targeted preprotein. Expression of the complementary DNA in the seeds of Arabidopsis thaliana resulted in BTE activity, and medium chains accumulated at the expense of long-chain (greater than or equal to 16) FAs. Laurate became the most abundant FA species and was deposited in the storage triacylglycerols. These results demonstrate a mechanism for medium-chain FA synthesis in plants.