The gene encoding the novel enzyme N-acylamino acid racemase (AAR) was cloned in recombinant phage lambda-4 from the DNA library of Amycolatopsis sp, TS-1-60, a rare actinomycete, using antiserum against the enzyme. The cloned gene was subcloned and transformed in Escherichia coli JM105 using pUC118 as a vector. The AAR gene consists of an open-reading frame of 1104 nucleotides, which specifies a 368-amino-acid protein with a molecular mass of 39411Da. The molecular mass deduced from the AAR gene is in good agreement with the subunit molecular mass (40kDa) of AAR from Amycolatopsis sp. TS-1-60. The guanosine plus cytosine content of the AAR gene was about 70%. Athough the AAR gene uses the unusual initiation codon GTG, the gene was expressed in Escherichia coli using the Inc promoter of pUC118. The amount of the enzyme produced by the transformant was 16 times that produced by Amycolatopsis sp. TS-1-60. When the unusual initiation codon GTG was changed to ATG, the enzyme productivity of the transformant increased to more than 37 times that of Amycolatopsis sp. TS-1-60. In the comparison of the DNA sequence and the deduced amino acid sequence of AAR with those of known racemases and epimerases in data bases, no significant sequence homology was found. However, AAR resembles mandelate racemase in that requires metal ions for enzyme activity. Comparison of the deduced amino acid sequences of mandelate racemase and AAR revealed amino acid sequences in AAR similar to those of both the catalytic and metal-ion-binding sites of mandelate racemase.