Two novel gram-positive bacteria capable of accumulating poly(3-hydroxybutyrate-co-3-hydroxyvalerate) [poly(3HB-co-3HV)] were isolated from an anaerobic-oxic activated sludge system fed with acetate. Strains Lpha5 and Lpha7 are motile cocci, 1-2 mum in diameter, occurring singly or in pairs. These isolates have doubling times ranging from 0.4-1.7 d and can accumulate in high levels of poly(3HB-co-3HV) (up to 44.7% of cell dry weight) when grown on complex media. Furthermore, these two strains exhibited the rapid substrate uptake and accumulation of storage granules as observed in situ. Under aerobic conditions, about 14.4% (cell dry weight) polyhydroxyalkanoate and 82% (carbon dry weight) cellular carbohydrate were produced from acetate and glucose, respectively. Under anaerobic conditions, poly(3HB-co-3HV) and cellular carbohydrate accumulated when glucose but not acetate was fed. The result of analysis of 168 rRNA sequence revealed that both strains belong to the gram-positive high-G+C group, but are significantly different from their closest phylogenetic relatives, Dermatophilus sp. and Terrabacter sp., to warrant classification as a new species.