A 16-kb BamHI fragment of the lactose plasmid pNZ63 from Leuconostoc lactis NZ6009 was cloned in Escherichia coli MC1061 by using pACYC184 and was found to express a functional beta-galactosidase. Deletion and complementation analysis showed that the coding region for beta-galactosidase was located on a 5.8-kb SalI-BamHI fragment. Nucleotide sequence analysis demonstrated that this fragment contained two partially overlapping genes, lacL (1,878 bp) and lacM (963 bp), that could encode proteins with calculated sizes of 72,113 and 35,389 Da, respectively. The L. lactis beta-galactosidase was overproduced in E. coli by using a lambda pL expression system. Two new proteins with M(r)s of 75,000 and 36,000 appeared upon induction of PL. The N-terminal sequences of these proteins corresponded to those deduced from the lacL and lacM gene sequences. Mutation and deletion analysis showed that lacL expression is essential for LacM production and that both the lacL and lacM genes are required for the production of a functional beta-galactosidase in E. coli. The deduced amino acid sequences of the LacL and LacM proteins showed considerable identity with the sequences of the N- and C-terminal parts, respectively, of beta-galactosidases from other lactic acid bacteria or E. coli. DNA and protein sequence alignments suggest that the L. lactis lacL and lacM genes have been generated by an internal deletion in an ancestral beta-galactosidase gene.