We have examined the induction of glutathione-dependent formaldehyde dehydrogenase (GS-FDH) activity in Escherichia coli and Hemophilus influenza. Formaldehyde was found to induce enzyme activity in both E. coli and H. influenza at concentrations between 0.6 and 20 ppm. Higher formaldehyde concentrations were toxic. Methanol concentrations up to 20% (200,000 ppm) and sodium formate concentrations up to 2% (20,000 ppm) gave negligible amounts of induction. The basic mechanism of induction was probed by inducing GS-FDH activity in the presence of rifampicin to inhibit RNA synthesis or chloramphenicol to inhibit protein synthesis. Both reagents inhibited GS-FDH induction, demonstrating that regulation occurs at the level of transcription. These results indicate that at least one function of GS-FDH in Gram-negative bacteria is to detoxify exogenous formaldehyde encountered in their environment and that GS-FDH inducibility may be a common feature of Gram-negative bacteria.