It has been shown previously that the otsA and otsB mutations block osmoregulatory trehalose synthesis in Escherichia coli. We report that the transcription of these osmoregulated ots genes is dependent on KatF (AppR), a putative sigma factor for certain stationary phase- and starvation-induced genes. The transcription of the osmoregulated bet and proU genes was not katF dependent. Our genetic analysis showed that katF carries an amber mutation in E. coli K-12 and many of its derivatives but that katF has reverted to an active form in the much-used strain MC4100. This amber mutation in katF leads to strain variations in trehalose synthesis and other katF-dependent functions of E. coli. We have performed a molecular cloning of the otsBA genes, and we present evidence that they constitute an operon encoding trehalose-6-phosphate phosphatase and trehalose-6-phosphate synthase. A cloning and restriction site analysis, performed by comparing the cloned fragments with the known physical map of the E. coli chromosome, revealed that the otsBA genes are situated on a 2.9-kb HindIII fragment located 8 to 11 kb clockwise of tar (41.6 min).