An Escherichia coli strain deficient in p-aminobenzoate synthesis was mutagenized, and derivatives were selected for growth on folic acid. Supplementation was shown to be due to p-aminobenzoyl-glutamate present as a breakdown product in commercial folic acid preparations. Two classes of mutations characterized by the minimum concentration of p-aminobenzoyl-glutamate that could support growth were obtained. Both classes of mutations were genetically and physically mapped to about 30 min on the E. coli chromosome. A cloned wild-type gene from this region, abgT (formerly ydaH) could confer a similar p-aminobenzoyl-glutamate utilization phenotype on the parental strain. Interruption of abgT on the plasmid or on the chromosome of the mutant strain resulted in a loss of the phenotype. abgT was the third gene in an apparent operon containing abgA, abgB, abgT, and possibly ogt and might be regulated by a divergently transcribed LysR-type regulator encoded by abgR. Two different single-base-pair mutations that gave rise to the p-aminobenzoyl-glutamate utilization phenotype lay in the abgR-abgA intercistronic region and appeared to allow the expression of abgT. The second class of mutation was due to a tandem duplication of abgB and abgT fused to fnr. The abgA and abgB gene products were homologous to one another and to a family of aminoacyl aminohydrolases. p-Aminobenzoyl-glutamate hydrolysis could be detected in extracts from several of the mutant strains, but intact abgA and abgB were not essential for p-aminobenzoyl-glutamate utilization when abgT was supplied in trans.