The P450alk gene, which is inducible by the assimilation of alkane in Candida tropicalis, was sequenced and characterized. Structural features described in promoter and terminator regions of Saccharomyces yeast genes are present in the P450alk gene and some particular structures are discussed for their possible role in the inducibility of this gene. Expression of the P450alk gene was achieved in Saccharomyces cerevisiae using the yeast alcohol dehydrogenase expression system after removal of the P450alk gene flanking regions. The resultant expressed protein had a molecular mass slightly greater than that of P450alk from C. tropicalis. This alteration did not prevent the function and localization of P450alk expressed in S. cerevisiae, as this organism showed an acquired microsome-bound activity for the terminal hydroxylation of lauric acid. The deduced P450alk amino acid sequence was compared with members of the nine known P450 gene families. These comparisons indicated that P450alk had a low relationship with these members and was therefore the first member (A1) of a new P450 gene family (LII). (Copyright (c) 1989 Elsevier Science Publishers B.V. (Biomedical Division).)