Vitreoscilla globin (vgb) gene, encoding for Vitreoscilla haemoglobin (VtHb) has been cloned and functionally expressed in heterologous bacterial hosts. Analysis of vgb gene expression and the study on vgb-xylE transcriptional fusion revealed that vgb promoter is preferentially activated in response to oxygen limitation in Vitreoscilla and other heterologous bacterial hosts. Microaerobic mode of induction in various hosts, provided evidence for a common regulatory factor involved in activation of vgb promoter under hypoxic condition. Primary structure analysis of vgb upstream regulatory region indicated the presence of a possible binding site for the transcriptional activator, FNR. Further, the E.coli mutant lacking fnr gene product was not able to activate vgb promoter under microaerobic condition, suggesting the involvement of FNR or FNR-like proteins in modulating its activity. The possibility of a second level of control by CRP is also indicated. Oxygen responsive nature and regulatory characteristics of vgb promoter offers a novel system for the expression of gene in heterologous bacterial hosts in an oxygen dependent manner.