By using natural abundance (13)C NMR spectroscopy, we investigated the types of compatible solutes synthesized in a variety of Bacilli under high salinity growth conditions. Glutamate, proline, and ectoine were the dominant compatible solutes synthesized by the various Bacillus species. The majority of the inspected Bacilli produced the tetrahydropyrimidine ectoine in response to high salinity stress, and a subset of these also synthesized a hydroxylation derivative of ectoine, 5-hydroxyectoine. In Salibacillus salexigens, a representative of the ectoine- and 5-hydroxyectoine-producing species, ectoine production was linearly correlated with the salinity of the growth medium and dependent on an ectABC biosynthetic operon. The formation of 5-hydroxyectoine was primarily a stationary growth phase phenomenon. The enzyme responsible for ectoine hydroxylation (EctD) was purified from S. salexigens to apparent homogeneity. The EctD protein was shown in vitro to directly hydroxylate ectoine in a reaction dependent on iron(II), molecular oxygen, and 2-oxoglutarate. We identified the structural gene (ectD) for the ectoine hydroxylase in S. salexigens. Northern blot analysis showed that the transcript levels of the ectABC and ectD genes increased as a function of salinity. Many EctD-related proteins can be found in data base searches in various Bacteria. Each of these bacterial species also contains an ectABC ectoine biosynthetic gene cluster, suggesting that 5-hydroxyectoine biosynthesis strictly depends on the prior synthesis of ectoine. Our data base searches and the biochemical characterization of the EctD protein from S. salexigens suggest that the EctD-related ectoine hydroxylases are members of a new subfamily within the non-heme-containing, iron(II)- and 2-oxoglutarate-dependent dioxygenase superfamily (EC 1.14.11).