It has not been clear whether the membrane-bound Il-lactamase III of Bacillus cereus 569 is a separate enzyme or a modified form of the secreted Il-lactamase I. The membrane enzyme is an acyl-glyceride thioether-linked lipoprotein (J. B. K. Nielsen and J. Q. Lampen, Biochemistry 22:4652-4656, 1983) and thus is probably a separate entity. We cloned the P-lactamase III gene (blaZ) on a 4.9-kilobase-pair ClaI fragment from mutant strain 569/H (constitutive for high-level production of 3-lactamases I, II, and III), and the nucleotide sequence was determined. The structural gene was flanked by typical promoter, transcription termination, and translation initiation sequences. Expression of the cloned gene in Escherichia coli was low in exponential-phase cultures and increased only as the cultures reached the stationary phase. The deduced amino acid sequence indicates a pre-p-lactamase III of 316 amino acid residues (35,021 daltons), with a 29-residue signal peptide and a mature lipoprotein form of -32,500 daltons. The 12 NH2-terminal residues of a 21-kilodalton tryptic peptide from the B. cereus membrane enzyme were in agreement with the sequence deduced from the cloned gene. The amino acid sequence was highly homologous to the class A P-lactamases, especially that of Bacillus licheniformis 749, f-Lactamase III is a distinct class A enzyme and the product of a separate gene (blaZ).Bacillus cereus 569/H is unusual in that it makes three different P-lactamases.