We report the identification of a new locus, designated cobC, involved in the assembly of the nucleotide loop of cobalamin in Salmonella typhimurium. The cobC gene has been mapped, cloned, and sequenced. DNA sequence analysis suggested that cobC is divergently transcribed from the adjacent cobD gene and suggests that the regulatory region of these genes overlap. The cobC gene codes for a predicted polypeptide of 26 kDa with striking homology to phosphoglycerate mutase, fructose-2,6-bisphosphatase, and acid phosphatase enzymes. In vitro experiments demonstrated that CobC dephosphorylated the cobalamin biosynthetic intermediate N1-(5-phospho-alpha-D-ribosyl)-5,6-dimethylbenzimidazole to generate N1-alpha-D-ribosyl-5,6-dimethylbenzimidazole. In vivo data showed that the lack of cobC function blocks the synthesis of cobalamin from its precursors cobinamide and 5,6-dimethylbenzimidazole, i.e. it prevents the assembly of the nucleotide loop of cobalamin. Additionally, exogenous N1-alpha-D-ribosyl-5,6-dimethylbenzimidazole rescues the defect of a cobC mutant. We propose that cobC codes for a novel phosphatase whose primary role is in cobalamin biosynthesis. A model for the sequence of biosynthetic steps that assemble the nucleotide loop of cobalamin in S. typhimurium is presented.