Cell-free extracts of Bacillus subtilis strains GSY and 168 convert (14)C-phosphoglycerate to (14)C-serine phosphate and (14)C-serine. These reactions indicate a functional phosphorylated pathway for serine biosynthesis in these cells. The addition of serine to the incubation mixture inhibited the formation of both radioactive products. Extracts of mutant strains that require serine for growth lacked the capacity to synthesize serine phosphate, confirming that the phosphorylated pathway was the only functional pathway available for serine synthesis. Serine phosphate phosphatase and phosphoglycerate dehydrogenase activity were demonstrated in cell extracts, and the phosphoglycerate dehydrogenase was shown to be inhibited specifically by l-serine. The extent of serine inhibition increased when the temperature was raised from 25 to 37 C, and the thermal stability of the enzyme was enhanced by the presence of the inhibitor serine or the coenzyme reduced nicotinamide adenine dinucleotide. At 37 C the curve representing the relationship between phosphoglycerate concentration and enzyme velocity was biphasic, and the serine inhibition which was competitive at low substrate concentrations became noncompetitive at higher concentrations.