The osmB gene of Escherichia coli, whose expression is induced by elevated osmolarity, was cloned and physically mapped to a 0.65-kilobase-pair NsiI-HincII DNA fragment at 28 min on E. coli chromosome. The OsmB protein was identified in minicells expressing the cloned gene. The nucleotide sequence of a 652-base-pair chromosomal DNA fragment containing the osmB gene was determined. The open reading frame encodes a 72-residue polypeptide with an Mr of 6,949. This reading frame was confirmed by sequencing the fusion joint of an osmB::TnphoA gene fusion. The amino-terminal amino acid sequence of the open reading frame is consistent with reported signal sequences of exported proteins. The sequence around the putative signal sequence cleavage site, Leu-Ser-Ala-Cys-Ser-Asn, is highly homologous to the consensus sequence surrounding the processing site of bacterial lipoproteins. The presence of a lipid moiety on the protein was confirmed by demonstrating the incorporation of radioactive palmitic acid and inhibition of processing by globomycin. Preliminary localization of the authentic OsmB protein was determined in minicells harboring a plasmid that carries the NsiI-HincII fragment; it was primarily in the outer membrane. Surprisingly, an osmB mutant carrying the osmB::TnphoA insertion mutation was more resistant to the inhibition of metabolism by high osmolarity than the parent strain was.