The fructose-1,6-bisphosphatase [Fru(1,6)P2ase] gene of the budding yeast, Kluyveromyces lactis, was cloned and sequenced. The gene encodes one open reading frame predicting a 354-amino-acid polypeptide. The polypeptide is different from other Fru(1,6)P2ases in that it contains a short amino-acid-insert region close to a basic residue located at the binding site for the allosteric inhibitor AMP. Comparison of the biochemical properties of the K. lactis enzyme with its closest homolog, the Saccharomyces cerevisiae Fru(1,6)P2ase (74% amino acid identity), reveals that the K. lactis enzyme is significantly less sensitive to AMP (Ki = 540 microM) than the S. cerevisiae enzyme (Ki = 190 microM). However, studies with a K. lactis Fru(1,6)P2ase mutant, in which the insert region (amino acids 152-160) was deleted by site-directed mutagenesis [(des-152-160)Fru(1,6)P2ase], showed that the mutant enzyme had higher sensitivity to AMP inhibition (Ki = 280 microM) than the control K. lactis enzyme. Thus, the nine-amino-acid insert region appears to be responsible for the decreased AMP inhibition shown by the K. lactis wild-type enzyme. Catabolite-repression and catabolite-inactivation studies show that, unlike the complete repression of FBP1 mRNA and inactivation of enzyme activity by glucose seen in S. cerevisiae, mRNA levels and enzyme activity of K. lactis Fru(1,6)P2ase decreased only about 2-4-fold due to the presence of glucose in the cell-culture medium.