Substantial concentrations of phloroglucinol were synthesized by Pseudomonas fluorescens Pf-5 expressing the plasmid-localized phlACBDE gene cluster responsible for biosynthesis of 2,4-diacetylphloroglucinol. Expression in Escherichia coli of a single gene in this cluster, P. fluorescens Pf-5 phlD, led to extracellular accumulation of phloroglucinol. Purification of PhlD to homogeneity afforded an enzyme that catalyzed the conversion of malonyl-CoA into phloroglucinol with Km = 5.6 muM and kcat = 10 min-1. Acetylase and deacetylase activities were observed with the catalyzed interconversions of phloroglucinol, 2-acetylphloroglucinol, and 2,4-diacetylphloroglucinol when phlACB was expressed in E. coli. Beyond the mechanistic implications attendant with the identification of an enzyme that catalyzes the conversion of malonyl-CoA into phloroglucinol, PhlD provides the basis for environmentally benign syntheses of phloroglucinol and resorcinol from glucose.