Bacillus anthracis produces a gamma-linked poly-D-glutamic acid capsule that is essential for virulence. A 6.2 kb fragment of B. anthracis DNA (cap), when present in Escherichia coli, produces a capsular polymer that is immunologically identical to that produced by B. anthracis. By immunodiffusion analysis of E. coli strains carrying varying portions of the cap region, we identified a novel gene (dep) responsible for degradation of the capsular polymer of B. anthracis. The simultaneous presence of the cap region and the dep gene caused production of low-molecular-weight, degraded capsular polymer both in E. coli and in B. anthracis, whereas the cap region alone caused production of a high-molecular-weight capsule. The dep gene mapped immediately downstream of the cap region within a 1.8 kb fragment and was transcribed in the same direction. This fragment was sequenced and a 1401 bp open reading frame (ORF) was found that is predicted to encode a peptide with molecular weight of 51,460. By in vitro transcription-translation analysis, this ORF was shown to be the dep gene product. The deduced amino acid sequence of the dep product has sequence similarity to E. coli and mammalian gamma-glutamyltranspeptidase (GGT). However, the Dep protein did not have GGT activity. The Dep protein appears to be an enzyme that catalyses the hydrolysis of the poly-D-glutamic acid capsule. Although the biological functions of the dep gene are unknown, it is possible that low-molecular-weight, diffusible polyglutamates produced through the action of the dep gene may act to inhibit host defence mechanisms.