The esterase encoding genes, est1 and est2, were cloned from Acetobacter pasteurianus. Nucleotide sequence analysis of est1 revealed a gene of 954 bp, and est1 coded for an arylesterase with a molecular weight of 34863 Da consisting of 317 amino acids. The est2 gene contained an open reading frame composed of 1221 bp encoding an esterase with a molecular weight of 43389 Da consisting of 406 amino acids. The est1 gene showed some similarity, but the est2 gene showed no significant homology to other esterases reported in various microorganisms. Northern blot analysis of total RNA from A. pasteurianus revealed that transcription of the est1 gene was induced only when the cells were grown in a medium containing ethanol, and suggested that the est1 transcript is monocistronic. In contrast, transcription of the est2 gene was repressed in the presence of ethanol. In the absence of ethanol, expression of the est2-mRNA, capable of encoding a multiple number of proteins, was revealed by Northern blot analysis. In addition, deletion analysis indicated that the 5'-region of the est2 gene contained a cis-acting domain for est2 transcriptional regulation. Analysis of the est1 promoter using the chloramphenicol acetyltransferase gene as a reporter gene showed that the promoter within the 305-bp fragment upstream of the ATG initiation codon was responsible for the transcription in cells grown in the presence of ethanol. Primer extension analysis of est1-mRNA showed that the transcription initiation site was 49 bp upstream from the ATG initiation codon. The results of a gel mobility shift assay indicated that there is a regulatory protein related to est1 regulation, which may have some relation to the ethanol resistance of Acetobacter sp.