After wounding, the moss Physcomitrella patens emits fatty acid derived volatiles like octenal, octenols and (2E)-nonenal. Flowering plants produce nonenal from C18-fatty acids via lipoxygenase and hydroperoxide lyase reactions, but the moss exploits the C20 precursor arachidonic acid for the formation of these oxylipins. We describe the isolation of the first cDNA (PpHPL) encoding a hydroperoxide lyase from a lower eukaryotic organism. The physiological pathway allocation and characterization of a downstream enal-isomerase gives a new picture for the formation of fatty acid derived volatiles from lower plants. Expression of a fusion protein with a yellow fluorescent protein in moss protoplasts showed that PpHPL was found in clusters in membranes of plastids. PpHPL can be classified as an unspecific hydroperoxide lyase having a substrate preference for 9-hydroperoxides of C18-fatty acids but also the predominant substrate 12-hydroperoxy arachidonic acid is accepted. Feeding experiments using arachidonic acid show an increase in the 12-hydroperoxide being metabolized to C8-aldehydes/alcohols and (3Z)- nonenal, which is rapidly isomerized to (2E)-nonenal. PpHPL knock out lines failed to emit (2E)-nonenal while formation of C8-volatiles was not affected indicating that in contrast to flowering plants, PpHPL is only involved in formation of a specific subset of volatiles.