Azotobacter vinelandii (ATCC 12837) became competent to be transformed by exogenous deoxyribonucleic acid towards the end of exponential growth. Competence in wild-type and nitrogenase auxotrophic (nif-) strains was repressed by the addition of ammonium salts or urea to the transformation medium. Transformation of wild-type cells and nif- strains was optimal on nitrogen-free or nitrogen-limiting medium, respectively. Transformation of wild-type cells also was enhanced when the transformation medium had low molydbate content. During the development of competence, nitrogen was growth limiting, whereas carbon (glucose) was in excess. Carbon source shift-down was not effective in inducing competence. Shifting glucose-grown wild-type cells to medium containing 0.2% beta-hydroxybutyrate initiated encystment and also induced competence. The addition of glucose to this medium blocked encystment and early competence induction and reduced the transformation frequency to the basal level. Cyclic adenosine 3',5'-monophosphate induced competence in wild-type nitrogen-fixing cells and increased the transformation frequency 1,000-fold over the basal level. Exogenous cyclic adenosine 3',5'-monophosphate however, did not reverse nitrogen repression of competence in ammonia-grown wild-type or nif- strains.