Madagascar periwinkle (Catharanthus roseus [L.] G. Don, Apocynaceae) produces monoterpene indole alkaloids (MIAs), secondary metabolites of high interest due to their therapeutic value. A key step in the biosynthesis is the generation of geraniol from geranyl diphosphate (GPP) in the monoterpenoid branch of the MIA pathway. Here we report on the cloning and functional characterization of C. roseus geraniol synthase (CrGES). The full-length CrGES was over-expressed in Escherichia coli and the purified recombinant protein catalyzed the conversion of GPP into geraniol with a K_m value of 58.5 μM for GPP. In vivo CrGES activity was evaluated by heterologous expression in a Saccharomyces cerevisiae strain mutated in the farnesyl diphosphate synthase gene. Analysis of culture extracts by gas chromatography-mass spectrometry confirmed the excretion of geraniol into the growth medium. Transient transformation of C. roseus cells with a Yellow Fluorescent Protein-fusion construct revealed that CrGES is localized in plastid stroma and stromules. In aerial plant organs, RNA in situ hybridization showed specific labeling of CrGES transcripts in the internal phloem associated parenchyma as observed for other characterized genes involved in the early steps of MIA biosynthesis. Finally, when cultures of Catharanthus cells were treated with the alkaloid-inducing hormone methyl jasmonate, an increase in CrGES transcript levels was observed. This observation coupled with the tissue-specific expression and the subcellular compartmentalization support the idea that CrGES initiates the monoterpenoid branch of the MIA biosynthetic pathway.