Two protein subunits (42,000 and 78,000 daltons) encoded by the fadAB genes form a multifunctional enzyme complex containing thiolase, 3-hydroxyacyl-coenzyme A dehydrogenase, crotonase , epimerase, and isomerase activities (S. Pawar and H. Schulz, J. Biol. Chem. 256:3894-3899, 1981). In an attempt to characterize the structural organization and regulatory properties of these genes, a 5.2-kilobase pair fragment containing the fadAB genes has been isolated. Plasmids containing this fragment (i) complement mutations in the fadAB genes; (ii) overproduce by 10- to 50-fold thiolase, 3-hydroxyacyl-coenzyme A dehydrogenase and crotonase ; and (iii) specify a 42,000- and a 78,000-dalton protein. The fadA gene, which encodes the 42,000-dalton protein, has been localized within the original clone to a 3.3-kilobase pair fragment. Thiolase activity, which is encoded by the 42,000-dalton protein, was not observed in the absence of the 78,000-dalton protein, suggesting that an intact complex is required for function. Transposon Tn5 insertional mutagenesis of the cloned fadAB genes has demonstrated that both fadA and fadB are transcribed as a single transcriptional unit with the direction of transcription from fadA to fadB . The molecular cloning and characterization of the fadAB region confirm the original genetic contention that the genes encoding the proteins for the multifunctional complex form an operon.