An operon involved in cryptic xylitol metabolism of Pantoea ananatis was cloned by transposon tagging. A xylitol negative mutant with a transposon insertion in the xylitol 4-dehydrogenase gene (xdh) was isolated and genomic DNA around the transposon was sequenced. Consequently, six consecutive genes, xytB-G are located downstream of xdh in the same strand. These seven genes are cotranscribed as a single transcript in a P ananatis xylitol-utilizing mutant, suggesting that they comprise an operon. In addition to xdh, xytF also encodes oxidoreductase that is a member of the short-chain dehydrogenase/reductase family. Recombinant Escherichia coli that heterologously expresses the Xdh protein converts xylitol to xylulose as expected. On the other hand, the recombinant XytF protein has activity with L-arabitol but not with xylitol. XytB, xytD and xytE have significant sequence similarities to genes encoding the substrate-binding, ATP-binding and permease subunits, respectively, of ATP-binding cassette transporters. Although the physiological role of the operon remains unknown, the operon appears to be involved in uptake and metabolism of a various sugar alcohols. A gene encoding a DeoR-type transcriptional regulator, xylR, is located upstream of the operon in the opposite strand and a single nucleotide substitution that could cause a nonsense mutation is present in the xytR gene of the xylitol-utilizing mutant. This result suggests that the product of xytR negatively controls expression of the operon like other DeoR regulators.