Ethanol-utilization in Aspergillus nidulans is mediated by alcohol dehydrogenase I and aldehyde dehydrogenase encoded by alcA and aldA, respectively. Both genes are under the transcriptional control of the specific activator AlcR and the general carbon catabolite repressor CreA. The alcR and alcA genes are closely linked in chromosome VII; aldA is located in chromosome VIII. We have identified five other transcripts that are expressed from the same genomic region as alcA and alcR. They are inducible by the gratuitous inducer ethyl methyl ketone (EMK), and are carbon catabolite repressed. The corresponding genes, designated alcM, alcS, alcO, alcP, and alcU, are differentially regulated by the specific transcriptional activator AlcR, and they are not all under the direct control by the CreA repressor. Some of the inducible transcripts are very abundant in the cell, whereas others are poorly expressed. Two sets of genes, alcM/alcS and alcR/alcO, are divergently transcribed and probably share a common cis-acting region, whereas alcP and alcU are individually transcribed from the same strand as alcA and alcR, and have their own promoters. The significance of the alc gene clustering is discussed. At least four of the five novel alc genes in the cluster are not essential for ethanol metabolism.