More than 40 eudicot and monocot species distributed over 21 lineages have been reported to possess intermediate C₃ and C₄ photosynthetic characteristics and CO₂ compensation points. These intermediate species are likely remnants of the complex processes that led to the evolution of C₄ plants from C₃ ancestors, although reversions from the C₄ condition have also been suggested. Moreover, a number of identified C₃-C₄ species occur in taxa that are not closely related to any C₄ lineage, raising the possibility that the C₃-C₄ photosynthetic pathway may be a distinct adaptation. This, in addition to the small number of intermediate species found so far cast doubts over their physiological and ecological fitness, and whether they represent living fossils of evolutionary paths or evolutionary dead-ends (Rawsthorne 1992; Sage et al. 2011).

Leaves of all C₃-C₄ intermediates have partial or full kranz anatomy, with prominent bundle sheath cells containing chloroplasts and other organelles, and intermediate interveinal distances. Bundle sheath chloroplasts contain Rubisco and functional PCR cycle in both mesophyll and bundle sheath cells. Intermediate leaves also have CO₂ compensation points that are lower than what is observed for C₃ leaves and can be indistinguishable from C₄ leaves, due to reduced photorespiration. Biochemically, C₃-C₄ intermediates differ in the level of activity of the C₄ cycle and the extent to which CO₂ is concentrated in bundle sheath cells.

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Figure 2.10. Schematic representation of the ‘photorepiratory pump’ operating in C₃-C₄ photosynthesis. The intermediate photosynthetic pathway reduces photorespiration by refixing photorespired CO₂ released locally in the bundle sheath cell. Mesophyll mitochondria lack glycine decarboxylase activity. Mesophyll and bundle sheath cells contain chloroplasts with functional Calvin cycle. Abbreviations: cp: chloroplast; GDC: glycine decarboxylase; PCO: photosynthetic oxidative cycle; PCR: photosynthetic reductive cycle; mt: mitochondrion.

C₃-C₄ intermediate plants reduce photorespiration (and hence, CO₂ compensation point) using a ‘photorespiratory pump’ based on modified localisation of the mitochondrial photorespiratory enzyme, glycine decarboxylase (Figure 2.10). In these plants, glycine decarboxylase activity is restricted to bundle sheath cells and excluded from mesophyll cells. Consequently, photorespired CO₂ is released in the bundle sheath where it is largely refixed by Rubisco and the bundle sheath PCR before it diffuses back to the mesophyll. Such a system may weakly elevate CO₂ in bundle sheath cells. Intermediate species that rely on the ‘photorespiratory pump’ are termed C₃-like or Type I intermediates (e.g., Panicum milioides, Flaveria pubescens) and have intermediate CO₂ compensation points and negligible C₄ cycle activity.

In Type II and C₄-like intermediates (e.g., Flaveria brownii), up to 70% of atmospheric CO₂ may be first fixed into C₄ acids. These plants have C₄-like CO₂ compensation points but are not classified as C₄ plants because they lack the strict localisation of photosynthetic enzymes (e.g., Rubisco is present in mesophyll cells) and their bundle sheath cell walls have high CO₂ permeability, resulting in only a partial CO₂ concentrating mechanism (Brown 1980; Ku et al. 1991; Rawthorne 1992; Vogan and Sage 2011).

The physiological advantages of the intermediate photosynthetic pathway in all its naturally occurring forms remain unclear. It may be hypothesised that lowered photorespiration may lead to reduced CO₂ limitation of photosynthesis, and thus allow C₃-C₄ plants to operate with lower stomatal conductance, thus conferring higher water use efficiency relative to C₃ counterparts. Moreover, increased nitrogen cost associated with ‘building’ another set of photosynthetic cells (bundle sheath) may reduce nitrogen use efficiency if the gains in CO₂ uptake are not substantial.

Work conducted with C₃-C₄ species yielded inconclusive evidence on the likely advantages of C₃-C₄ photosynthesis relative to the ancestral C₃ mode. Generally, these studies demonstrated that, short of substantial C₄ cycle activity and advanced cell-specific localisation of C₃ and C₄ cycle enzymes between the mesophyll and bundle sheath cells, C₃-C₄ photosynthesis does not improve photosynthetic efficiency (Bolton and Brown 1980; Pinto et al. 2011, Vogan and Sage 2011). Therefore, partial recycling of photorespired CO₂ or a partial CO₂ concentrating mechanism reduce photorespiratory loss normally associated with C₃ photosynthesis, without leading to significant gains in plant fitness or productivity.