The nucleotide sequence of the bgaB gene, which encodes the thermostable beta-galactosidase I of Bacillus stearothermophilus, and its flanking region was determined. A 2,016-base-pair open reading frame observed was concluded to be for beta-galactosidase I (Mr 78,051) from observations that the amino acid composition of the enzyme and the sequence of 14 amino acids from the amino-terminus of the enzyme coincided with those deduced from this open frame. A 107-base-pair HaeIII-AluI fragment just upstream of the estimated Shine-Dalgarno sequence of the bgaB gene had promoter activity toward cat-86 (chloramphenicol acetyltransferase gene) and produced the enzyme at a level equivalent to 7% of the total cellular protein of B. subtilis. From the base sequence of this DNA region and the transcriptional start site determined by S1 nuclease mapping, the -35 and -10 sequences are estimated to be TTGACA and TAATTT, respectively, which are similar to the consensus sequence of B. subtilis sigma 43 RNA polymerase.