Catharanthus roseus produces low levels of two dimeric terpenoid indole alkaloids, vinblastine and vincristine, which are widely used in cancer chemotherapy. The dimerization reaction leading to α-3',4'-anhydrovinblastine is a key regulatory step for the production of the anticancer alkaloids in planta and has potential application in the industrial production of two semisynthetic derivatives also used as anticancer drugs. In this work, we report the cloning, characterization, and subcellular localization of an enzyme with anhydrovinblastine synthase activity identified as the major class III peroxidase present in C. roseus leaves and named CrPrx1. The deduced amino acid sequence corresponds to a polypeptide of 363 amino acids including an N-terminal signal peptide showing the secretory nature of CrPrx1. CrPrx1 has a two-intron structure and is present as a single gene copy. Phylogenetic analysis indicates that CrPrx1 belongs to an evolutionary branch of vacuolar class III peroxidases whose members seem to have been recruited for different functions during evolution. Expression of a green fluorescent protein-CrPrx1 fusion confirmed the vacuolar localization of this peroxidase, the exact subcellular localization of the alkaloid monomeric precursors and dimeric products. Expression data further supports the role of CrPrx1 in α-3',4'-anhydrovinblastine biosynthesis, indicating the potential of CrPrx1 as a target to increase alkaloid levels in the plant.