Jasmonic acid (JA) is a lipid-derived signal that regulates a wide variety of developmental and defense-related processes in higher plants. JA is synthesized from linolenic acid via an enzymatic pathway that initiates in the plastid and terminates in peroxisomes. The C18 JA precursor 12-oxo-phytodienoic acid (OPDA) is converted in the peroxisome to 3-oxo-2-(2'-[Z]-pentenyl)cyclopentane-1-octanoic acid (OPC-8:0), which subsequently undergoes three rounds of beta-oxidation to yield JA. Although most JA biosynthetic enzymes have been identified, several key steps in the pathway remain to be elucidated. To address this knowledge gap, we employed co-expression analysis to identify genes that are coordinately regulated with known JA biosynthetic components in Arabidopsis. Among the candidate genes uncovered by this approach was a 4-coumarate-CoA ligase-like member of the acyl-activating enzyme (AAE) gene family, which we have named OPC-8:0 CoA Ligase1 (OPCL1). In response to wounding, opcl1 null mutants exhibited reduced levels of JA and hyperaccumulation of OPC-8:0. Recombinant OPCL1 was active against both OPDA and OPC-8:0, as well as medium-to-long straight-chain fatty acids. Subcellular localization studies with green fluorescent protein-tagged OPCL1 showed that the protein is targeted to peroxisomes. These findings establish a physiological role for OPCL1 in the activation of JA biosynthetic precursors in leaf peroxisomes, and further indicate that OPC-8:0 is a physiological substrate for the activation step. The results also demonstrate the utility of co-expression analysis for identification of factors that contribute to jasmonate homeostasis.