DL-2-amino-Delta(2)-thiazolin-4-carbonic acid (DL-ATC) is a substrate for cysteine synthesis in some bacteria, and this bioconversion has been utilized for cysteine production in industry. We cloned a DNA fragment containing the genes involved in the conversion of L-ATC to L-cysteine from Pseudomonas sp. strain BS. The introduction of this DNA fragment into Escherichia coli cells enabled them to convert L-ATC to cysteine via N-carbamyl-L-cysteine (L-NCC) as an intermediate. The smallest recombinant plasmid, designated pTK10, contained a 2.6-kb insert DNA fragment that has L-cysteine synthetic activity. The nucleotide sequence of the insert DNA revealed that two open reading frames (ORFs) encoding proteins with molecular masses of 19.5 and 44.7 kDa were involved in the L-cysteine synthesis from DL-ATC. These ORFs were designated atcB and atcC, respectively, and their gene products were identified by overproduction of proteins encoded in each ORF and by the maxicell method. The functions of these gene products were examined using extracts of E. coli cells carrying deletion derivatives of pTK10. The results indicate that atcB and atcC are involved in the conversion of L-ATC to L-NCC and the conversion of L-NCC to cysteine, respectively. atcB was first identified as a gene encoding an enzyme that catalyzes thiazolin ring opening. AtcC is highly homologous with L-N-carbamoylases. Since both enzymes can only catalyze the L-specific conversion from L-ATC to L-NCC or L-NCC to L-cysteine, it is thought that atcB and atcC encode L-ATC hydrolase and N-carbamyl-L-cysteine amidohydrolase, respectively.