The archaebacterium, Halobacterium halobium, achieves buoyancy through synthesis of intracellular gas-filled vesicles. The plasmid-encoded gene (gvpA) specifying the major structural gas vesicle protein has previously been cloned and sequenced allowing the analysis of high-frequency mutations to the vesicle negative phenotype. Among eighteen gas vesicle mutants analyzed, four were observed to contain insertion elements 0.2 to 2 kb upstream of the structural gene. To explain the phenotype of these mutants, the upstream area was analyzed by DNA sequencing and transcriptional mapping. This analysis showed the presence of two open reading frames, gvpD and gvpE, which are of opposite transcriptional orientation to gvpA (gene order gvpA-D-E). gvpD begins 201 nucleotides from the gvpA structural gene and is 1608 nucleotides long while gvpE begins two nucleotides from the 3'-end of gvpD and is 573 nucleotides long. Primer extension analysis showed the occurrence of divergent promoters in the gvpA-gvpD intergenic region with the transcription start sites separated by 109 nucleotides. The sites of three insertion sequences in gas vesicle mutants mapped within gvpE while the fourth insertion site mapped near the N-terminal coding region of gvpD. Homology between the gvpDE gene region and a chromosomal site in a H. halobium NRC-1 derivative and in several other Halobacterium strains was identified by Southern hybridization.