The genes implicated in the catabolism of the amino acid arginine by Lactobacillus hilgardii X(1)B were investigated to assess the potential for formation of ethyl carbamate precursors in wine. L. hilgardii X(1)B can use arginine via the arginine deiminase pathway. The complete nucleotide sequence of the arc genes involved in this pathway has been determined. They are clustered in an operon-like structure in the order arcABC. No evidence was found for the presence of a homologue of the arcD gene, coding for the arginine/ornithine antiporter. The arc genes have been expressed in Escherichia coli resulting in arginine deiminase (ArcA), ornithine carbamoyltransfera (ArcB) and carbamate kinase (ArcC) activities. The results indicate the need for caution in the selection of lactic acid bacteria for conducting malolactic fermentation in wine since arginine degradation could result in high amounts of ethyl carbamate.