All genes for phosphonate (Pn) utilization in Escherichia coli are in a large cluster of 14 genes named, in alphabetical order, phnC to phnP. Plasmids carrying these genes were mutagenized by using TnphoA'-1, and 43 mutants containing simple insertions were studied in detail. Their insertion sites were defined by restriction mapping and by DNA sequencing. One or more mutations in each phn gene was identified. In 23 mutants, expression of the TnphoA'-1 lacZ gene was phosphate starvation inducible. These mutants had TnphoA'-1 oriented in line behind the phnC promoter, i.e., in the + orientation. In 20 mutants, the TnphoA'-1 lacZ gene was expressed at a low basal level. These mutants had insertions in the opposite orientation. All 43 phn::TnphoA'-1 insertions were recombined onto the chromosome to test for mutational effects, and their structures on the chromosome were verified by DNA hybridization. Those in the + orientation were switched to TnphoA'-9, which has an outward promoter for expression of downstream genes. These insertions were tested for polar effects by measuring beta-glucuronidase synthesis from a uidA gene transcriptionally fused to the 3' end of the phnP gene. The results indicate the following: (i) the phnC-to-phnP gene cluster is an operon of 14 genes, and the phnC promoter is the sole psi promoter; (ii) three gene products (PhnC, PhnD, and PhnE) probably constitute a binding protein-dependent Pn transporter; (iii) seven gene products (PhnG, PhnH, PhnI, PhnJ, PhnK, PhnL, and PhnM) are required for catalysis and are likely to constitute a membrane-associated carbon-phosphorus (C-P) lyase; (iv) two gene products (PhnN and PhnP) are not absolutely required and may therefore be accessory proteins for the C-P lyase; and (v) two gene products (PhnF and PhnO) are not required for Pn use and may have a regulatory role because they have sequence similarities to regulatory proteins. The mechanism for breaking the C-P bond by a lyase is discussed in light of these results.