osmE, an osmotically inducible gene of Escherichia coli, was physically mapped on the bacterial chromosome, cloned and sequenced. osmE appeared to encode a 12,021 Da protein of unknown function, with a lipoprotein-type signal sequence at the amino-terminus. The osmE reading frame was confirmed by sequencing the junction of an osmE-phoA gene fusion. osmE was demonstrated to be transcribed as a single cistron. A phi [osmEp-lac] operon fusion was constructed, and analysis of its expression demonstrated that osmE osmotic regulation probably occurs at the transcriptional level. The osmE promoter was identified by both S1 nuclease and primer extension mapping of the 5' end of the osmE mRNA, by deletion analysis and by identification of a point mutation reducing its activity. Sequence information sufficient for expression and osmotic regulation is present on a DNA fragment extending from positions -37 to +52 with respect to the osmE transcription start. Uninduced expression of the osmE-lac fusion was increased in the presence of mutations in the hns and himA genes. The osmE promoter overlaps a promoter for a gene transcribed in the opposite direction, efg. Transcription from the efg promoter is only weakly affected by osmotic pressure and is independent of the presence of an intact OsmE protein.