Mycolic acids represent a major constituent of the mycobacterial cell wall complex, which provides the first line of defense against potentially lethal environmental conditions. Slow-growing pathogenic mycobacteria such as Mycobacterium tuberculosis modify their mycolic acids by cyclopropanation, whereas fast-growing saprophytic species such as Mycobacterium smegmatis do not, suggesting that this modification may be associated with an increase in oxidative stress experienced by the slow-growing species. We have demonstrated the transformation of the distal cis double bond in the major mycolic acid of M. smegmatis to a cis-cyclopropane ring upon introduction of cosmid DNA from M. tuberculosis. This activity was localized to a single gene (cma1) encoding a protein that was 34% identical to the cyclopropane fatty acid synthase from Escherichia coli. Adjacent regions of the DNA sequence encode open reading frames that display homology to other fatty acid biosynthetic enzymes, indicating that some of the genes required for mycolic acid biosynthesis may be clustered in this region. M. smegmatis overexpressing the cma1 gene product significantly resist killing by hydrogen peroxide, suggesting that this modification may be an important adaptation of slow-growing mycobacteria to oxidative stress.