The interaction between the tropical legume Sesbania rostrata and the bacterium Azorhizobium caulinodans results in the formation of nodules on both stem and roots. Stem nodulation was used as a model system to isolate early markers by differential display. One of them, Srchi24 is a novel early nodulin whose transcript level increased already 4 h after inoculation. This enhancement depended on Nod factor-producing bacteria. Srchi24 transcript levels were induced also by exogenous cytokinins. In situ hybridization and immunolocalization experiments showed that Srchi24 transcripts and proteins were present in the outermost cortical cell layers of the developing nodules. Sequence analyses revealed that Srchi24 is similar to class III chitinases, but lacks an important catalytic glutamate residue. A fusion between a maltose-binding protein and Srchi24 had no detectable hydrolytic activity. A function in nodulation is proposed for the Srchi24 protein.