The location of the rho gene and its position relative to the ilv genes of Escherichia coli K-12 was analyzed using genetic criteria, restriction enzyme cleavage, and maxicell analysis. Plasmids were constructed with deletions of the rho gene introduced in vitro, and lambda ilv-gal derivatives of lambda ilv-rho bacteriophage were isolated by recombination in vivo. A HindIII restriction fragment of 8 kilobases (kb) previously shown to contain at least part of the rho gene (Gray et al. 1981) was cloned into plasmid pMC81. This vector has transcription stop sites that present read-through expression of cloned genes from either direction, and cloning sites upstream of the lacZ gene coding for beta-galactosidase. The position of the rho gene and flanking sequences required for its expression were further localized to a region of approximately 2 kb by introducing deletions using restriction enzyme treatment of these plasmids. A promoter in the rho region was found to direct beta-galactosidase synthesis in these plasmid derivatives. Derivatives of lambda ilv-rho phage were isolated in vivo by pyrophosphate chelation selection for phage with reduced genome size. Restriction enzyme analysis of twelve of these derivatives revealed an unexpected bias towards phage recombinants as opposed to simple internal deletions.