Methylobacterium extorquens AM1 produces pyrroloquinoline quinone (PQQ), the prosthetic group of methanol dehydrogenase. Two genes clusters have been shown to be required for PQQ biosynthesis in this micro-organism and complementation analysis has identified seven pqq genes, pqqDGCBA and pqqEF. The DNA sequence of pqqDGC' was reported previously. This paper reports the sequence of the genomic region corresponding to pqqC'BA. For consistency, the nomenclature of pqq genes in Klebsiella pneumoniae will be followed. The new nomenclature for pqq genes of M. extorquens AM1 is pqqABCDE and pqqFG. In the genomic region sequenced in this study, two open reading frames were found. One of these encodes pqqE, which showed high identity to analogous pqq genes in other bacteria. PqqE also showed identity to MoaA and NifB in the N-terminal region, where a conserved CxxxCxYC sequence was identified. The sequence of the second open reading frame covered both the pqqC and pqqD regions, suggesting that both functions were encoded by this gene. It is proposed to designate this gene pqqC/D. The deduced amino acid sequence of the pqqC/D products showed identity to PqqC of K. pneumoniae and Pqql of Acinetobacter calcoaceticus in the N-terminal region, and to PqqD of K. pneumoniae and Pqql of A. calcoaceticus in the C-terminal region. A fragment of M. extorquens AM1 DNA containing only pqqC/D produced a protein of 42 kDa in Escherichia coli, which corresponds to the size of the deduced amino acid sequence of PqqC/D, confirming the absence of a separate pqqD. This genomic region complemented the growth of pqqC mutants of M. extorquens AM1 and Methylobacterium organophilum DSM 760 on methanol. As previously reported for pqq genes of K. pneumoniae, a pqqC mutant of M. extorquens AM1 produced an intermediate of PQQ biosynthesis, which was converted to PQQ by incubation with a crude extract from E.coli cells expressing PqqC/D. The intermediate was found in both crude extract and culture supernatant, and it was purified from the crude extract. The PqqC/D enzyme reaction appeared to require molecular oxygen and reduced nicotinamide adenine dinucleotides.