DNA sequences corresponding to the aerolysin gene (aer) of Aeromonas hydrophila AH2 DNA were identified by screening a cosmid gene library for hemolytic and cytotoxic activities. A plasmid containing a 5.8-kilobase EcoRI fragment of A. hydrophila DNA was required for full expression of the hemolytic and cytotoxic phenotype in Escherichia coli K-12. Deletion analysis and transposon mutagenesis allowed us to localize the gene product to 1.4 kilobases of Aeromonas DNA and define flanking DNA regions affecting aerolysin production. The reduced hemolytic activity with plasmids lacking these flanking regions is associated with a temporal delay in the appearance of hemolytic activity and is not a result of a loss of transport functions. The aerolysin gene product was detected as a 54,000-dalton protein in E. coli maxicells harboring aer plasmids and by immunoblotting E. coli whole cells carrying aer plasmids. We suggest that the gene coding aerolysin be designated aerA and that regions downstream and upstream of aerA which modulate its expression and activity be designated aerB and aerC, respectively.