Polyhydroxyalkanoate (PHA) biosynthesis genes were cloned and characterized from Alcaligenes sp. SH-69 which can synthesize poly(3-hydroxybutyrate-co-3-hydroxyvalerate) from a single carbon source. The DNA sequence analysis revealed two consecutive genes coding for PHA synthase and beta-ketothiolase and the gene coding for acetoacetyl-Coa reductase located about 2-kbp downstream of the two genes. Recombinant Escherichia coli strains with the cloned PHA biosynthesis genes synthesized poly(3-hydroxybutyrate) in Luria-Bertani medium containing 2% glucose and poly(3-hydroxybutyrate-co-3-hydroxyvalerate) in M9 minimal medium supplemented with 1% glucose, 1 mM valine, and 2 mM threonine, which demonstrates that the PHA biosynthesis genes of Alcaligenes sp. SH-69 are functional in E. coli.