1. A search for nucleoside phosphotransferase activity in Bacillus cereus led to the following results: (i) The phosphotransferase activity was associated with a membrane bound 5'-nucleotidase. (ii) The enzyme phosphorylates both purine and pyrimidine nucleosides as well as 2',3'-dideoxyinosine. (iii) The enzyme was inhibited by adenylic nucleotide di- and triphosphates, and its nucleotidase activity was increased in the presence of inosine as phosphate acceptor. 2. Bacterial and vertebrate 5'-nucleotidases with phosphotransferase activity differ for several characteristics, such as cellular location, substrate specificity, magnesium requirement and regulation.