The lip gene of Escherichia coli has been cloned and sequenced. Subcloning of a 3-kilobase EcoRI/EcoRV restriction fragment from Clark-Carbon plasmid pLC15-5 into pUC18 gives a plasmid that complements two lipoate auxotrophs, W1485-lip2 and JRG33-lip9, and which expresses a protein of approximately 36,000 Da. Sequencing suggests that lip codes for a protein of 281 amino acids (31,350 Da), showing sequence similarity to biotin synthase. It is thus likely that lip encodes a sulfur insertion enzyme analogous to biotin synthase and that the sulfur insertion chemistries of the two systems are related. Unidirectional nested deletion experiments show that both lipoate auxotrophs are complemented by the same 500-base pair region at the 3' terminus of the lip gene, indicating that the mutations affecting lipoate biosynthesis are located in this region of the protein. A small open reading frame located immediately downstream of the lip gene codes for a small protein of unknown function.