A region of 14.2 kb has been analysed that is a part of a locus on the Methylobacterium extorquens AM1 chromosome containing a number of genes involved in one-carbon (C1) metabolism, including serine cycle genes, pqq genes, regulatory methanol oxidation genes and the gene for N5,N10-methylene tetrahydrofolate dehydrogenase (mtdA). Fifteen new ORFs have been identified within the new region, and their sequences suggest that they encode the following polypeptides: the C-terminal part of phosphoenolpyruvate carboxylase, malyl-CoA lyase, polypeptides of 9.4 and 31 kDa of unknown function, three putative subunits of an ABC-type transporter, two polypeptides similar to the products of mxaF and mxaJ from M. extorquens AM1 and other methylotrophs, a cytochrome c, three enzymes of folate metabolism, and polypeptides of 13 and 20.5 kDa with no homologues in the protein database. Ten insertion mutations have been generated in the region to determine if the newly identified genes are associated with C1 metabolism. A mutation in mclA, encoding malyl-CoA lyase, resulted in a C1-minus phenotype, while mutations in the other genes all showed a C1-plus phenotype. It was not possible to obtain null mutants in a putative folate metabolism gene, folC, implying the necessity of these folate synthesis genes for metabolism of C1 and multicarbon compounds. Mutations in the putative ABC transporter genes, the genes similar to mxaG and mxaJ, and other unidentified ORFs produced double-crossover recombinants with a C1-positive phenotype. Promoter regions have been investigated upstream of orf3 and orf4 using the promoter probe vector pHX200. Transcription from these promoters was weak in wild-type M. extorquens AM1 but increased in regulatory mox mutants.