Rhizobium etli accumulates poly-beta-hydroxybutyrate (PHB) in symbiosis and in free life. PHB is a reserve material that serves as a carbon and/or electron sink when optimal growth conditions are not met. It has been suggested that in symbiosis PHB can prolong nitrogen fixation until the last stages of seed development, but experiments to test this proposition have not been done until now. To address these questions in a direct way, we constructed an R. etli PHB-negative mutant by the insertion of an Omega-Km interposon within the PHB synthase structural gene (phaC). The identification and sequence of the R. etli phaC gene are also reported here. Physiological studies showed that the PHB-negative mutant strain was unable to synthesize PHB and excreted more lactate, acetate, pyruvate, beta-hydroxybutyrate, fumarate, and malate than the wild-type strain. The NAD+/NADH ratio in the mutant strain was lower than that in the parent strain. The oxidative capacity of the PHB-negative mutant was reduced. Accordingly, the ability to grow in minimal medium supplemented with glucose or pyruvate was severely diminished in the mutant strain. We propose that in free life PHB synthesis sequesters reductive power, allowing the tricarboxylic acid cycle to proceed under conditions in which oxygen is a limiting factor. In symbiosis with Phaseolus vulgaris, the PHB-negative mutant induced nodules that prolonged the capacity to fix nitrogen.