The DNA insert of plasmid pK52 contains the fadAB operon coding for the Escherichia coli fatty acid oxidation complex. Studies on the operon's structure and organization revealed that the initiator codon (ATG) of the structural gene for 3-ketoacyl-CoA thiolase, the fadA gene, is located 109 nucleotides 3' to the stop codon (TGA) of the fadB gene that encodes the alpha-subunit, a multifunctional polypeptide. The direction of transcription of this operon is thus from fadB to fadA. The orientation of the fadA and fadB genes is the reverse of what had been published previously. The structural gene for thiolase is 1,164 nucleotides long and starts six nucleotides downstream from a Shine-Dalgarno sequence. 109 nucleotides of 5'-noncoding and 321 nucleotides of 3'-noncoding regions are also reported. The 3-ketoacyl-CoA thiolase beta-subunit is composed of 388 residues and has a calculated Mr of 40,889. The alpha- and beta-subunits were separated by gel filtration in formic acid, and the sequence of the amino-terminal 10 amino acids of the beta-subunit coincided with that deduced from the nucleotide sequence data. Sequence comparisons suggest that Cys-91 of the E. coli enzyme is the active-site cysteine residue and that the consensus sequence of the active sites of 3-ketoacyl-CoA thiolases is Asn-Arg-X1-Cys-X2-Ser-X3-X4-Gln. Although the quaternary structure of E. coli 3-ketoacyl-CoA thiolase is different from that of other thiolases, the sequence is homologous to rat and human peroxisomal and rat mitochondrial 3-ketoacyl-CoA thiolases, to the extent of 42, 41, and 37%, identity, respectively. An evolutionary tree of thiolases was constructed; it suggests that the genes of E. coli and peroxisomal 3-ketoacyl-CoA thiolases diverged after the appearance of eukaryotic cells.