Pseudomonas sp. strain SE83 converts cephalosporin C and 7 beta-(4-carboxybutanamido)cephalosporanic acid (GL-7ACA) to 7-aminocephalosporanic acid (7ACA). A DNA library of this strain was constructed in Escherichia coli and screened for the ability to deacylate GL-7ACA to 7ACA. Apparently, two distinct genes, designated acyI and acyII, were cloned on 4.8- and 6.0-kilobase-pair BglII fragments, respectively. The enzymes encoded by the two genes showed different substrate specificities, and the acyII-encoded enzyme was found to yield 7ACA from cephalosporin C by direct deacylation. Expression of the two genes in E. coli was strongly dependent on a promoter of the vector. The coding regions for acyI and acyII were localized on the 2.5- and 2.8-kilobase-pair fragments, respectively, by subcloning experiments, and high expression of both genes was obtained by placing them under the control of the lacUV5 promoter. The acyII-encoded enzyme was purified and shown to be composed of two nonidentical subunits with molecular weights of 26,000 and 57,000. Maxicell analysis revealed three acyII-specific polypeptides, two of which corresponded to the above subunits. The third polypeptide with a molecular weight of 83,000 was suggested to be the precursor of both subunits.