Mycothiol is the predominant thiol in most actinomycetes, including Mycobacterium tuberculosis, and appears to play a role analogous to glutathione, which is not found in these bacteria. The enzymes involved in mycothiol biosynthesis are of interest as potential targets for new drugs directed against tuberculosis. In this work we describe the isolation and characterization of a Tn 5 transposon mutant of Mycobacterium smegmatis that is blocked in the production of mycothiol and accumulates its precursor, 1 D-myo-inosityl 2- L-cysteinylamido-2-deoxy-alpha-D-glucopyranoside (Cys-GlcN-Ins). Cys-GlcN-Ins isolated from this mutant was used to assay for acetyl-CoA:Cys-GlcN-Ins acetyltransferase (mycothiol synthase, MshD) activity, which was found in wild-type cells, but not in the mutant. Sequencing outward of the DNA of the mutant strain from the site of insertion permitted identification of the mshD gene in the M. smegmatis genome, as well as the orthologous gene Rv0819 in the M. tuberculosis genome. Cloning and expression of mshD from M. tuberculosis (Rv0819) in Escherichia coli gave a transformant with MshD activity, demonstrating that Rv0819 is the mshD mycothiol biosynthesis gene.