The beta-galactosidase-encoding mbgA gene has recently been cloned from Bacillus megaterium. We now report that disruption of the chromosomal mbgA rendered B. megaterium unable to utilize lactose as a sole carbon source. Complementation of the mbgA mutant with a multicopy plasmid carrying intact mbga restored the ability to utilize lactose for cell growth. Crude extracts from the wild-type B. megaterium cells grown in the presence of lactose exhibited a significant level of lactose-hydrolyzing activity, whereas no activity was observed in crude extracts of the mbgA mutant grown under the same condition. The mbgA gene could also confer the ability of lactose utilization on a lacZ deletion mutant of Escherichia coli. Lactose-hydrolyzing activity was also observed in crude extracts of the lacZ deletion mutant carrying mbgA on a multicopy plasmid. In addition, inactivation of the chromosomal mbgA did not affect lactose induction of expression of the mbgA promoter-xylE transcriptional fusion. Taken together, these results suggest that mbgA is essential for lactose utilization by B. megaterium, but is not involved in generation of the intracellular inducer for lactose induction of mbgA expression.