5'-Nucleotidase (5NU) in Dictyostelium discoideum is an enzyme that shows high substrate specificity to 5'-AMP. The enzyme has received considerable attention in the past because of the critical role played by cyclic AMP in cell differentiation in this organism. Degradation of cAMP by cAMP phosphodiesterase (PDE) produces 5'-AMP, the substrate of 5NU. During the time course of development, the enzyme activity of 5NU increases and becomes restricted to a narrow band of cells that form the interface between the prestalk/prespore zones. We have purified a polypeptide associated with 5NU enzyme activity. Protein sequence of this peptide was obtained from mass spectrometry and Edman degradation. Polymerase chain reaction PCR amplification of genomic DNA using degenerate oligonucleotides and a search of sequences of a cDNA project yielded DNA fragments with sequence corresponding to the peptide sequence of 5NU. In addition, a clone was found that corresponded to the classical 'alkaline phosphatase' (AP) as described in several organisms. The sequences of the 5NU and AP cDNAs were not similar, indicating they are the products of separate genes and that both genes exist in Dictyostelium. Analysis of the expression of 5nu during Dictyostelium development by Northern blotting determined that the gene is developmentally regulated. Southern blot analysis showed a single form of the 5nu gene. Targeted gene disruption and knockout mutagenesis using the 5nu sequences suggested that a 5nu mutation may be lethal.