Naphthalene dioxygenase, a key enzyme in the dihydroxylation of naphthalene, is encoded by the plasmid pN3, responsible for naphthalene metabolism in Pseudomonas fluorescens N3. The naphthalene dioxygenase, including all the sequences for its expression and the regulatory region, has been localized on the 4.3-kb HindIII-ClaI fragment and on the 3.5-kb HindIII fragment of the plasmid pN3, by Southern analysis using as probes nahA and nahR genes, the homologous genes of the plasmid NAH7 from Pseudomonas putida G7. We cloned in Escherichia coli JM109 the dioxygenase gene and its regulatory region and developed an efficient bacterial system inducible by salicylic acid, able to produce dihydrodiols. E. coli containing recombinant plasmids carrying the dioxygenase gene were analysed for their potential as a biocatalytic tool to produce dihydrodiols from different naphthalenes with the substituent on the aromatic ring at the alpha or beta position. The dihydrodiols, identified by HPLC (high-performance liquid chromatography) and 1H-NMR (nuclear magnetic resonance) were produced with yields ranging from 50 to 94%. The degree of bioconversion efficiency depends on the nature and the position of the substituent and indicates the broad substrate specificity of this dioxygenase and its potential for the production of a wide variety of fine chemicals.