Induction of Agrobacterium tumefaciens virulence genes by plant phenolic compounds is essential for successful T-DNA transfer to a host plant. In Douglas fir needles, the major virulence region inducer is the glycoside coniferin (J. W. Morris and R. O. Morris, Proc. Natl. Acad. Sci. USA 87:3612-3618, 1990). Agrobacterium strains with high beta-glucosidase activity respond to coniferin and infect Douglas fir seedlings, whereas most strains with low beta-glucosidase activity fail to respond to coniferin and are avirulent on this host. We have cloned two beta-glucosidase genes from A. tumefaciens B3/73 and sequenced one of them, cbg1. It appears to be part of a polycistronic unit and shows a high bias for GC-rich codons. When expressed in Escherichia coli, Cbg1 beta-glucosidase hydrolyzes coniferin but not cellobiose. The 88-kDa predicted product of cbg1 is highly similar to one other bacterial beta-glucosidase and several fungal beta-glucosidases. There is little homology between Cbg1 and other bacterial beta-glucosidases, including an Agrobacterium cellobiase.