The symbiosis between leguminous plants and soil rhizobia culminates in the formation of nitrogen-fixing organs called nodules that support plant growth. Two Medicago truncatula Tnt1-insertion mutants were identified that produced small nodules, which were unable to fix nitrogen effectively due to ineffective rhizobial colonization. The gene underlying this phenotype was found to encode a protein containing a putative membrane-localized DUF21 domain and a cystathionine-beta-synthase domain. cbs1 mutants had defective infection threads that were sometimes devoid of rhizobia and formed small nodules with greatly reduced numbers of symbiosomes. We studied the expression of the gene, designated MtCBS1 (M. truncatula Cystathionine Beta Synthase-like 1) using a promoter–β-glucuronidase gene fusion, which revealed expression in infected root hair cells, developing nodules, and in the invasion zone of mature nodules. An MtCBS1-GFP fusion protein localized to the infection thread and symbiosomes. Nod factor-induced Ca2+ responses were observed in the cbs1 mutant, indicating that MtCBS1 acts ‘downstream’ of Nod factor signaling. MtCBS1 expression occurred exclusively during Medicago-rhizobium symbiosis. Induction of MtCBS1 expression during symbiosis was found to be dependent on Nodule Inception (NIN), a key transcription factor that controls both rhizobial infection and nodule organogenesis. Interestingly, the closest homologue of MtCBS1, MtCBS2 was specifically induced in mycorrhizal roots suggesting common infection mechanisms in nodulation and mycorrhization. Related proteins in Arabidopsis thaliana have been implicated in cell wall maturation suggesting a potential role for CBS1 in the formation of the infection thread wall.