The nucleotide sequences of the hpaB and hpaC genes encoding the 4-hydroxyphenylacetate 3-hydroxylase from Escherichia coli W ATCC 11105 have been determined. These genes appear to be part of an operon and encode two proteins of 58,781 and 18,679 Da, respectively, that are required for hydroxylase activity. This aromatic hydroxylase is NADH-dependent and uses FAD as the redox chromophore. The largest component (HpaB) has been purified by affinity chromatography in Cibacron blue. E. coli cells that express exclusively hpaB showed only a very low hydroxylase activity that was enhanced in the presence of extracts containing the smallest protein HpaC. This behavior resembles that of the coupling protein of the 4-hydroxyphenylacetate 3-hydroxylase from Pseudomonas putida, and it might prevent the wasteful oxidation of NADH in the absence of substrate. Using a promoter-probe plasmid we have demonstrated that the hpaBC operon is expressed by a promoter inducible by 4-hydroxyphenylacetic acid. A gene, named hpaA, encoding a protein homologous to the XylS/AraC family of regulators, was identified upstream of the hydroxylase operon. The role played by HpaA in the regulation of the hpaBC operon remains to be elucidated. Since HpaB is not homologous to other aromatic hydroxylases, we suggest that the E. coli 4-hydroxyphenylacetate 3-hydroxylase is the first member of a new family of two-component aromatic hydroxylases sequenced so far.