A monoterpene ε-lactone hydrolase (MLH) from Rhodococcus erythropolis DCL14, catalyzing the ring opening of lactones which are formed during degradation of several monocyclic monoterpenes, including carvone and menthol, was purified to apparent homogeneity. It is a monomeric enzyme of 31 kDa that is active with (4R)-4-isopropenyl-7-methyl-2-oxo-oxepanone and (6R)-6-isopropenyl-3-methyl-2-oxo-oxepanone, lactones derived from (4R)-dihydrocarvone, and 7-isopropyl-4-methyl-2-oxo-oxepanone, the lactone derived from menthone. Both enantiomers of 4-, 5-, 6-, and 7-methyl-2-oxo-oxepanone were converted at equal rates, suggesting that the enzyme is not stereoselective. Maximal enzyme activity was measured at pR 9.5 and 30°C. Determination of the N-terminal amino acid sequence of purified MLH enabled cloning of the corresponding gene by a combination of PCR and colony screening. The gene, designated mlhB (monoterpene lactone hydrolysis), showed up to 43% similarity to members of the GDXG family of lipolytic enzymes. Sequencing of the adjacent regions revealed two other open reading frames, one encoding a protein with similarity to the short-chain dehydrogenase reductase family and the second encoding a protein with similarity to acyl coenzyme A dehydrogenases. Both enzymes are possibly also involved in the monoterpene degradation pathways of this microorganism. Molecular Sequence Numbers: EMBL: AJ292535; GENBANK: AJ292535; Chemicals/CAS: Bacterial Proteins; Carboxylic Ester Hydrolases, EC 3.1.1.-; Hydrolases, EC 3.-; Lactones; MlhA protein, Rhodococcus erythropolis, EC 1.-; MlhB protein, Rhodococcus erythropolis, EC 3.1.1.-; Oxidoreductases, EC 1.-; Terpenes