Discovered by M. D. Hatch and C. R. Slack in sugarcane, the C4 (Hatch-Slack) pathway is followed by tropical/sub-tropical grasses and some dicots — including sugarcane, maize and sorghum — whose first stable CO2-fixation product is the 4-carbon compound oxaloacetic acid (OAA), rather than the 3-carbon product (3-PGA) that defines ordinary C3/Calvin-cycle plants; this 3-carbon-versus-4-carbon distinction in the first stable product is itself the most direct way to identify whether a given plant is C3 or C4, and it is reflected structurally in a C4 leaf's distinctive Kranz ('wreath') anatomy — a ring of large, mostly agranal bundle-sheath cells wrapped around each vascular bundle, surrounded by smaller mesophyll cells whose chloroplasts, by contrast, are well supplied with grana.
In the mesophyll cells, atmospheric CO2 is fixed by the enzyme PEP carboxylase onto the 3-carbon acceptor phosphoenolpyruvic acid (PEP), forming oxaloacetic acid, which is converted to the 4-carbon malic acid and transported into the bundle-sheath cells; there it is decarboxylated back to pyruvic acid, releasing CO2 locally at a much higher concentration than the surrounding atmosphere. Because the bundle-sheath chloroplasts contain the ordinary Calvin-cycle enzymes, this local CO2-concentrating step is functionally why C3-pathway carbon fixation is confined to the bundle-sheath cells specifically in C4 plants — mesophyll cells in a C4 leaf lack Rubisco/the Calvin cycle and only run the CO2-pumping (C4) half of the pathway, while the bundle-sheath cells are where the high, locally-concentrated CO2 is actually fixed into sugar. This high local CO2 concentration also explains why Rubisco in a C4 plant's bundle sheath overwhelmingly favours its carboxylase activity over its oxygenase activity — the CO2:O2 ratio around Rubisco is kept so high by the pumping mechanism that the enzyme rarely 'sees' enough O2, relative to CO2, to run photorespiration — and it is precisely this CO2-concentrating mechanism, achieved through Kranz anatomy, that gives C4 plants their functional advantage: even though only the comparatively few bundle-sheath cells actually run the Calvin cycle (far fewer cells, per leaf area, than the mesophyll cells that carry out C3 photosynthesis directly in a C3 leaf), those few cells operate at a much higher, photorespiration-free efficiency because of the concentrated CO2 delivered to them, more than compensating for their smaller number and making C4 plants highly productive overall. …