The poly-beta-hydroxybutyrate biosynthetic thiolase gene from Zoogloea ramigera was used as a hybridization probe to screen restriction digests of Alcaligenes eutrophus H16 DNA. Specific hybridization signals were obtained and two fragments (a 2.3-kilobase PstI fragment and a 15-kilobase EcoRI fragment) cloned in the Escherichia coli vector pUC8 (plasmids pAeT3/pAeT10 and pAeT29, respectively). Biochemical analysis of lysates of E. coli cells containing each plasmid identified significant levels of beta-ketothiolase and acetoacetyl-CoA reductase enzyme activities in lysates of E. coli cells containing plasmids pAeT10 or pAeT29. Nucleotide sequence analysis of the pAeT10 insert identified two open reading frames which encode polypeptides of Mr = 40,500 and Mr = 26,300 corresponding to the structural genes for beta-ketothiolase (phbA) and acetoacetyl-CoA reductase (phbB), respectively. Amino acid sequence homologies between the two bacterial and two mammalian thiolases are discussed with respect to the chain length specificity exhibited by the different thiolase enzymes.