1. The enzymes beta-ketothiolase, acetoacetyl-CoA reductase, acetoacetate-succinate CoA-transferase (;thiophorase') and d(-)-3-hydroxybutyrate dehydrogenase have been partially purified from crude extracts of glucose-grown nitrogen-fixing batch cultures of Azotobacter beijerinckii. The condensation of acetyl-CoA to acetoacetyl-CoA catalysed by beta-ketothiolase is inhibited by CoASH, and the reverse reaction is inhibited by acetoacetyl-CoA. Acetoacetyl-CoA reductase has K(m) for acetoacetyl-CoA of 1.8mum and is inhibited by acetoacetyl-CoA above 10mum. The enzyme utilizes either NADH or NADPH as electron donor. The second enzyme of poly-beta-hydroxybutyrate degradation, d(-)-3-hydroxybutyrate dehydrogenase, is NAD(+)-specific and is inhibited by NADH, pyruvate and alpha-oxoglutarate. CoA transferase is inhibited by acetoacetate, the product of hydroxybutyrate oxidation. In continuous cultures poly-beta-hydroxybutyrate biosynthesis ceased on relaxation of oxygen-limitation and the rates in situ of oxygen consumption and carbon dioxide evolution of such cultures increased without a concomitant increase in glucose uptake. 2. On the basis of these and other findings a cyclic mechanism for the biosynthesis and degradation of poly-beta-hydroxybutyrate is proposed, together with a regulatory scheme suggesting that poly-beta-hydroxybutyrate metabolism is controlled by the redox state of the cell and the availability of CoASH, pyruvate and alpha-oxoglutarate. beta-Ketothiolase plays a key role in the regulatory process. Similarities to the pathways of poly-beta-hydroxybutyrate biosynthesis and degradation in Hydrogenomonas are discussed.