Plant chloroplasts are promising vehicles for recombinant protein production, but the process of protein folding in these organelles is not well understood in comparison with that in prokaryotic systems, such as Escherichia coli. This is particularly true for disulphide bond formation which is crucial for the biological activity of many therapeutic proteins. We have investigated the capacity of tobacco (Nicotiana tabacum) chloroplasts to efficiently form disulphide bonds in proteins by expressing in this plant cell organelle a well-known bacterial enzyme, alkaline phosphatase, whose activity and stability strictly depend on the correct formation of two intramolecular disulphide bonds. Plastid transformants have been generated that express either the mature enzyme, localized in the stroma, or the full-length coding region, including its signal peptide. The latter has the potential to direct the recombinant alkaline phosphatase into the lumen of thylakoids, giving access to this even less well-characterized organellar compartment. We show that the chloroplast stroma supports the formation of an active enzyme, unlike a normal bacterial cytosol. Sorting of alkaline phosphatase to the thylakoid lumen occurs in the plastid transformants translating the full-length coding region, and leads to larger amounts and more active enzyme. These results are compared with those obtained in bacteria. The implications of these findings on protein folding properties and competency of chloroplasts for disulphide bond formation are discussed.