This article reviews the current state-of-the-art concerning the functions of the signal processing protein PII in cyanobacteria and plants, with a special focus on evolutionary aspects. We start out with a general introduction to PII proteins, their distribution, and their evolution. We also discuss PII-like proteins and domains, in particular, the similarity between ATP-phosphoribosyltransferase (ATP-PRT) and its PII-like domain and the complex between N-acetyl-L-glutamate kinase (NAGK) and its PII activator protein from oxygenic phototrophs. The structural basis of the function of PII as an ATP/ADP/ 2-oxoglutarate signal processor is described for Synechococcus elongatus PII. In both cyanobacteria and plants, a major target of PII regulation is NAGK, which catalyzes the committed step of arginine biosynthesis. The common principles of NAGK regulation by PII are outlined. Based on the observation that PII proteins from cyanobacteria and plants can functionally replace each other, the hypothesis that PII-dependent NAGK control was under selective pressure during the evolution of plastids of Chloroplastida and Rhodophyta is tested by bioinformatics approaches. It is noteworthy that two lineages of heterokont algae, diatoms and brown algae, also possess NAGK, albeit lacking PII; their NAGK however appears to have descended from an alphaproteobacterium and not from a cyanobacterium as in plants. We end this article by coming to the conclusion that during the evolution of plastids, PII lost its function in coordinating gene expression through the PipX-NtcA network but preserved its role in nitrogen (arginine) storage metabolism, and subsequently took over the fine-tuned regulation of carbon (fatty acid) storage metabolism, which is important in certain developmental stages of plants.