Deletion mutants of Escherichia coli specific for hydrogenase isoenzyme 1 (HYD1) have been constructed and characterized. The hya operon, which contains genes for the two HYD1 structural subunits and four additional genes, was mapped at 22 min on the E. coli chromosome. The total hydrogenase activities of the HYD1-negative mutant and wild-type strains were similar. However, the formate dehydrogenase activity associated with the formate hydrogen lyase pathway was lower in the mutant. The hya mutant (strain AP1), complemented with only the hydrogenase structural genes (hyaAB), produced antigenically identifiable but inactive HYD1 protein. The first five genes of hya (hyaA to hyaE) were required for the synthesis of active HYD1, but wild-type levels of HYD1 activity were restored only when mutant cells were transformed with all six genes of the operon. When AP1 was complemented with hya carried on a high-copy-number plasmid, the HYD1 structural subunits were overexpressed, but the excess protein was unprocessed and localized in the soluble fraction of the cell. The products of hyaDEF are postulated to be involved in the processing of nascent structural subunits (HYAA and HYAB). This processing takes place only after the subunits are inserted into the cell membrane. It is concluded that the biosynthesis of active HYD1 is a complex biochemical process involving the cellular localization and processing of nascent structural subunits, which are in turn dependent on the insertion of nickel into the nascent HYD1 large subunit.