Wild-type Escherichia coli cells are unable to grow on beta-glucosides. Spontaneous mutants arise, however, which are able to utilize certain aromatic beta-glucosides such as salicin or arbutin as carbon sources, revealing the presence of a cryptic operon called bgl. Mutations activating the operon map within (or close to) the promoter region of the operon and are due to the transposition of an IS1 or IS5 insertion element into this region. This operon was reported to consist of three genes coding for a phospho-beta-glucosidase, a specific transport protein (enzyme IIBgl), and a positively regulating protein. We have defined the extent and location of three structural genes, bglC, bglS, and bglB, and have determined their DNA sequence. The amino acid sequences deduced from the open reading frames together with deletion and subcloning analyses suggest that the first gene, bglC, codes for the regulatory protein, the second, bglS, codes for the transport protein, and the third, bglB, for phospho-beta-glucosidase. A fourth gene may exist which codes for a product of unknown function. We discuss structural features of the DNA sequence which may bear on the regulation of the operon. Homologies to sequences preceding the gene for an excreted levansucrase of Bacillus subtilis, which are known to be involved in the regulation of this gene, and to sequences preceding the gene for an excreted beta-endoglucanase of B. subtilis, for which data pertaining to regulation are not yet available, suggest a close evolutionary relationship among the regulatory components of all three systems.