The lipo-penicillinase (LIPEN) gene from an alkalophilic Bacillus sp. strain 170 was cloned in Escherichia coli using the vector pHSG399. A plasmid, pFAP121, was isolated from an ampicillin resistant transformant and the cloned LIPEN gene was found to be in a 2.2 kb DNA fragment. The nucleotide sequence of a 1.9 kb segment encoding the LIPEN was determined. This segment showed an open reading frame which would encode a polypeptide of 310 amino acids. The amino acid sequence of this LIPEN gene product has strong homology with those of the Bacillus cereus beta-lactamase III and Bacillus licheniformis penicillinase.