Several DNA regions containing genes involved in poly--hydroxybutyrate (PHB) biosynthesis and degradation and also in fatty acid degradation were identified from genomic sequence data and have been characterized in the serine cycle facultative methylotroph Methylobacterium extorquens AM1. Genes involved in PHB biosynthesis include those encoding -ketothiolase (phaA), NADPH-linked acetoacetyl coenzyme A (acetylCoA) reductase (phaB), and PHB synthase (phaC). phaA and phaB are closely linked on the chromosome together with a third gene with identity to a regulator of PHB granule-associated protein, referred to as orf3. phaC was unlinked to phaA and phaB. Genes involved in PHB degradation include two unlinked genes predicted to encode intracellular PHB depolymerases (depA and depB). These genes show a high level of identity with each other at both DNA and amino acid levels. In addition, a gene encoding -hydroxybutyrate dehydrogenase (hbd) was identified. Insertion mutations were introduced into depA, depB, phaA, phaB, phaC, and hbd and also in a gene predicted to encode crotonase (croA), which is involved in fatty acid degradation, to investigate their role in PHB cycling. Mutants in depA, depB, hbd, and croA all produced normal levels of PHB, and the only growth phenotype observed was the inability of the hbd mutant to grow on -hydroxybutyrate. However, the phaA, phaB, and phaC mutants all showed defects in PHB synthesis. Surprisingly, these mutants also showed defects in growth on C 1 and C 2 compounds and, for phaB, these defects were rescued by glyoxylate supplementation. These results suggest that -hydroxybutyryl-CoA is an intermediate in the unknown pathway that converts acetyl-CoA to glyoxylate in methylotrophs and Streptomyces spp.Many prokaryotes, including aerobic methylotrophic bacteria, accumulate poly--hydroxybutyrate (PHB) intracellularly as a carbon and energy reserve material. Methylotrophic bacteria employing the serine cycle for formaldehyde assimilation are able to accumulate up to 80% of PHB by dry weight, while methylotrophic bacteria with the Calvin-Benson-Bassham cycle of C 1 assimilation can synthesize up to 20% of PHB by dry weight (14). In obligate methanol utilizers, which use the ribulose monophosphate pathway for assimilation of reduced C 1 compounds, PHB has not been detected (14).Two pathways for PHB synthesis are known in bacteria. In Ralstonia eutropha, Methylobacterium extorquens, Zoogloea ramigera, and Azotobacter beijerinckii PHB is synthesized from acetyl coenzyme A (acetyl-CoA) as a result of sequential action of three enzymes: -ketothiolase, NADPH-linked acetoacetylCoA reductase, and PHB synthase (5,15,19,33,34) (Fig. 1). In Rhodospirillum rubrum and Methylobacterium rhodezianum PHB synthesis is catalyzed by five enzymes: -ketothiolase, NADH-linked acetoacetyl-CoA reductase, L-(ϩ) and D-(Ϫ)-specific crotonyl-CoA hydratases (crotonases), and PHB synthase (27,28,29).The degradation of PHB in most bacteria is catalyzed by PHB depolymerase, -hydroxybutyrate dehydrogenase, ...