In most organisms, tetrahydrofolate (H(4)folate) is the carrier of C(1) fragments between formyl and methyl oxidation levels. The C(1) fragments are utilized in several essential biosynthetic processes. In addition, C(1) flux through H(4)folate is utilized for energy metabolism in some groups of anaerobic bacteria. In methanogens and several other Archaea, tetrahydromethanopterin (H(4)MPT) carries C(1) fragments between formyl and methyl oxidation levels. At first sight H(4)MPT appears to resemble H(4)folate at the sites where C(1) fragments are carried. However, the two carriers are functionally distinct, as discussed in the present review. In energy metabolism, H(4)MPT permits redox-flux features that are distinct from the pathway on H(4)folate. In the reductive direction, ATP is consumed in the entry of carbon from CO(2) into the H(4)folate pathway, but not in entry into the H(4)MPT pathway. In the oxidative direction, methyl groups are much more readily oxidized on H(4)MPT than on H(4)folate. Moreover, the redox reactions on H(4)MPT are coupled to more negative reductants than the pyridine nucleotides which are generally used in the H(4)folate pathway. Thermodynamics of the reactions of C(1) reduction via the two carriers differ accordingly. A major underlying cause of the thermodynamic differences is in the chemical properties of the arylamine nitrogen N(10) on the two carriers. In H(4)folate, N(10) is subject to electron withdrawal by the carbonyl group of p-aminobenzoate, but in H(4)MPT an electron-donating methylene group occurs in the corresponding position. It is also proposed that the two structural methyl groups of H(4)MPT tune the carrier's thermodynamic properties through an entropic contribution. H(4)MPT appears to be unsuited to some of the biosynthetic functions of H(4)folate, in particular the transfer of activated formyl groups, as in purine biosynthesis. Evidence bearing upon whether H(4)MPT participates in thymidylate synthesis is discussed. Findings on the biosynthesis and phylogenetic distribution of the two carriers and their evolutionary implications are briefly reviewed. Evidence suggests that the biosynthetic pathways to the two carriers are largely distinct, suggesting the possibility of (ancient) separate origins rather than divergent evolution. It has recently been discovered that some eubacteria which gain energy by oxidation of C(1) compounds contain an H(4)MPT-related carrier, which they are thought to use in energy metabolism, as well as H(4)folate, which they are thought to use for biosynthetic reactions.