The 4 202 353 bp genome of the alkaliphilic bacterium Bacillus halodurans C-125 contains 4066 predicted protein coding sequences (CDSs), 2141 (52.7%) of which have functional assignments, 1182 (29%) of which are conserved CDSs with unknown function and 743 (18. 3%) of which have no match to any protein database. Among the total CDSs, 8.8% match sequences of proteins found only in Bacillus subtilis and 66.7% are widely conserved in comparison with the proteins of various organisms, including B.subtilis. The B. halodurans genome contains 112 transposase genes, indicating that transposases have played an important evolutionary role in horizontal gene transfer and also in internal genetic rearrangement in the genome. Strain C-125 lacks some of the necessary genes for competence, such as comS, srfA and rapC, supporting the fact that competence has not been demonstrated experimentally in C-125. There is no paralog of tupA, encoding teichuronopeptide, which contributes to alkaliphily, in the C-125 genome and an ortholog of tupA cannot be found in the B.subtilis genome. Out of 11 sigma factors which belong to the extracytoplasmic function family, 10 are unique to B. halodurans, suggesting that they may have a role in the special mechanism of adaptation to an alkaline environment.