Considering the widespread occurrence of oxalate in nature and its broad impact on a host of organisms, it is surprising that so little is known about the turnover of this important acid. In plants, oxalate oxidase is the most well studied enzyme capable of degrading oxalate, but not all plants possess this activity. Recently, an Acyl Activating Enzyme 3 (AAE3), encoding an oxalyl-CoA synthetase, was identified in Arabidopsis. AAE3 has been proposed to catalyze the first step in an alternative pathway of oxalate degradation. Whether this enzyme and proposed pathway is important to other plants is unknown. Here, we identify the Medicago truncatula AAE3 (MtAAE3) and show that it encodes an oxalyl-CoA synthetase activity exhibiting high activity against oxalate with a Km = 81 ± 9 μM and Vmax = 19 ± 0.9 μmoles min-1mg protein-1. GFP-MtAAE3 localization suggested that this enzyme functions within the cytosol of the cell. Mtaae3 knock-down line showed a reduction in its ability to degrade oxalate into CO2. This reduction in the capacity to degrade oxalate resulted in the accumulation of druse crystals of calcium oxalate in the Mtaae3 knock-down line and an increased susceptibility to oxalate-secreting phytopathogens such as Sclerotinia sclerotiorum. Taken together, these results suggest that AAE3 dependent turnover of oxalate is important to different plants and functions in the regulation of tissue calcium oxalate crystal accumulation and in defense against oxalate-secreting phytopathogens.