A D-erythorbic acid-forming soluble flavoprotein, gluconolactone oxidase (GLO), was purified from Penicillium cyaneo-fulvum strain ATCC 10431 and partially sequenced. Peptide sequences were used to isolate a cDNA clone encoding the enzyme. The cloned gene exhibits high levels of similarity with the genes encoding other known eukaryotic lactone oxidases and also with the genes encoding some putative prokaryotic lactone oxidases. Analysis of the coding sequence of the GLO gene indicated the presence of a typical secretion signal sequence at the N terminus of GLO. No other targeting or anchoring signals were found, suggesting that GLO is the first known lactone oxidase that is secreted rather than targeted to the membranes of the endoplasmic reticulum or mitochondria. Experimental evidence, including the N-terminal sequence of mature GLO and data on glycosylation and localization of the enzyme in native and recombinant hosts, supports this analysis. The GLO gene was expressed in Pichia pastoris, and recombinant GLO was produced by using the strong methanol-induced AOX1 promoter. In order to evaluate the suitability of purified GLO for production of D-erythorbic acid, we immobilized it on N-hydroxysuccinimide-activated Sepharose and found that the immobilized GLO retained full activity during immobilization but was rather unstable under reaction conditions. Our results show that both soluble and immobilized forms of GLO can, in principle, be used for production of D-erythorbic acid from D-glucono-delta-lactone or (in combination with glucose oxidase and catalase) from glucose. We also demonstrated the feasibility of glucose-D-erythorbic acid fermentation with recombinant strains coexpressing GLO and glucose oxidase genes, and we analyzed problems associated with construction of efficient D-erythorbic acid-producing hosts.