The nucleotide sequence of the hsdR and M genes, together with that for hsdS comprises an 8400 base segment spanning the entire hsd region of Escherichia coli K-12. The three hsd genes are transcribed in the same direction, but from two promoters. hsdR and hsdM are separated by 492 base-pairs, whereas the termination codon of hsdM overlaps the initiation codon of hsdS. pres precedes hsdR, and our data indicate a transcription termination signal in the interval between hsdR and pmod, as expected if transcription of hsdM and S is dependent on pmod. Transcription from pres is not influenced by the products of the hsdM and S genes, and the mechanism whereby restriction is prevented when the hsd region is transferred to a modification-deficient cell remains to be elucidated. A segment of the predicted amino acid sequence of the M polypeptide shares homology with a variety of adenine methylases and may identify part of the active site for methylation of specific adenine residues. The R polypeptide shows homology with a variety of ATPases, and pronounced regions of alpha-helical structure are predicted, one of which is amphipathic.