The aim was to determine the function of peroxisomal NAD(+)-malate dehydrogenase (PMDH) in fatty acid beta-oxidation and the glyoxylate cycle in Arabidopsis. Seeds in which both PMDH genes are disrupted by T-DNA insertions germinate, but seedling establishment is dependent on exogenous sugar. Mutant seedlings mobilize their triacylglycerol very slowly and growth is insensitive to 2,4-dichlorophenoxybutyric acid. Thus mutant seedlings are severely impaired in beta-oxidation, even though microarray analysis shows that beta-oxidation genes are expressed normally. The mutant phenotype was complemented by expression of a cDNA encoding PMDH with either its native peroxisome targeting signal-2 (PTS2) targeting sequence or a heterologous PTS1 sequence. In contrast to the block in beta-oxidation in mutant seedlings, [C-14]acetate is readily metabolized into sugars and organic acids, thereby demonstrating normal activity of the glyoxylate cycle. We conclude that PMDH serves to reoxidize NADH produced from fatty acid beta-oxidation and does not participate directly in the glyoxylate cycle.