The marine ostracod Vargula hilgendorfii ejects luciferin and luciferase into seawater to produce a bright luminous cloud. The light is due to the oxidation of luciferin, an imidazopyrazine compound, by molecular oxygen, catalyzed by luciferase. The mechanism of the reaction has been studied extensively and the 60 kcal/mol required for the blue emission have been shown to be derived from the oxidation of luciferin via a dioxetanone intermediate, in which the excited state oxyluciferin bound to luciferase is the emitter. However, only limited information is available regarding the properties of the enzyme. This paper reports the cloning and sequence analysis of the cDNA for Vargula luciferase and the expression of the cDNA in a mammalian cell system. The primary structure, deduced from the nucleotide sequence, consists of 555 amino acid residues in a single polypeptide chain with a molecular weight of 62,171. Two regions of the enzyme show significant amino acid sequence homology with an N-terminal segment of the photoprotein aequorin. The Vargula luciferase gene, which contains a signal sequence for secretion, should be well suited as a reporter in studies of gene expression.