An intracellular D(-)-3-hydroxybutyrate (3HB)-oligomer hydrolase gene from Ralstonia eutropha (formerly Alcaligenes eutrophus) H16 was cloned, sequenced, and characterized. As a hybridization probe to screen restriction digests of chromosomal DNA, an extracellular 3HB-oligomer hydrolase gene from Ralstonia pickettii strain (formerly Pseudomonas sp. strain) A1 was used. A specific hybridization signal was obtained and a 6.5-kbp SmaI fragment was cloned in an Escherichia coli phagemid vector. The crude extract from E. coli with this plasmid showed 3HB-trimer hydrolase activity. The subcloned 3.2-kbp fragment still showed 3HB-trimer hydrolase activity in E. coli and expressed an approximately 78-kDa protein in an in vitro transcription-translation system. Nucleotide sequence analysis of the 3.2-kbp fragment showed an open reading frame that encodes a polypeptide with a deduced molecular weight of 78,510. The putative amino acid sequence showed 54% identity with that of the oligomer hydrolase from R. pickettii A1. By site-directed mutagenesis, a novel amino acid sequence (S-V-S*-N-G) containing an essential serine residue in the catalytic center of the enzyme was determined. The gene product was found in PHB-rich cells of R. eutropha by immunodetection. The expressed 3HB-oligomer hydrolase localized both in the supernatant fraction and the PHB granules of the cells.