The OCT plasmid-localized alkBAC operon encodes enzymes for alkane hydroxylation and alkanol dehydrogenation. The positively controlled expression of the operon is very efficient in both Pseudomonas putida and Escherichia coli. Two regulatory functions have been ascribed to the regulatory locus alkR: inducer recognition and transcriptional activation of the operon. We have cloned and localized the alkR locus on a 4.9-kilobase pair SalI fragment. The alkR region was analyzed for translation productions in E. coli minicells. Two proteins were identified: a 99- and a 48-kDa peptide. The positions of the cistrons encoding these proteins were established. Both cistrons were shown to be essential for an Alk phenotype. The first cistron (alkS), which encodes the 99-kDa protein, complemented alkR mutations affecting inducer specificity. Furthermore, we found that alkS is responsible for activation of expression of the alkBAC operon since it is required for the induction of the alkB gene product alkane hydroxylase. The second cistron (alkT), which encodes the 48-kDa protein, is required for reconstitution of an Alk phenotype but has no function in regulation of alkBAC expression. Thus, the expression of the alkBAC operon is regulated by a 99-kDa protein, whereas the 48-kDa protein is probably a component of the alkane hydroxylase complex.