We cloned the gene for 7-beta-(4-carboxybutanamido)-cephalosporanic acid (GL-7ACA) acylase from Pseudomonas strain C427. The DNA sequence revealed an open reading frame of 2154 bp coding for 718 amino acid residues. The deduced amino acid sequence consists of 4 structural domains : (i) a signal peptide (positions 1-27), (ii) a small subunit of the acylase (positions 28-190), designated as alpha, (iii) a spacer peptide (positions 191-198), (iv) a large subunit (positions 199-718), designated as beta. Plasmids were constructed to direct the synthesis of the acylase in Escherichia coli and the following results were obtained. The active acylase consists of two subunits which are processed from a single precursor protein, removing the spacer peptide during processing. A proportion of active acylase is secreted into the periplasm and the remainder is retained in the cytoplasm. The amount of precursor protein accumulated in the cytoplasm is greatly reduced when plasmids for the acylase lacking the signal sequence are expressed. Therefore, processing is independent of the translocation of the gene product through the cytoplasmic membrane, in contrast to the situation for penicillin G acylase. A high level of active enzyme production was achieved with a plasmid coding for an acylase in which the amino terminal sequence (positions 1-32) of native acylase is replaced by MFPTT.