During growth of Pseudomonas putida strain TW3 on 4-nitrotoluene (4NT) or its metabolite 4-nitrobenzoate (4NB), the culture medium gradually becomes yellow-orange with a lambda(max) of 446 nm. The compound producing this color has been isolated and identified as a new phenoxazinone, 2-aminophenoxazin-3-one-7-carboxylate (APOC). This compound is formed more rapidly and in greater quantity when 4-amino-3-hydroxybenzoate (4A3HB) is added to growing cultures of strain TW3 and is also formed nonbiologically when 4A3HB is shaken in mineral salts medium but not in distilled water. It is postulated that APOC is formed by the oxidative dimerization of 4A3HB, although 4A3HB has not been reported to be a metabolite of 4NT or a product of 4NB catabolism by strain TW3. Using the cloned pnb structural genes from TW3, we demonstrated that the formation of the phenoxazinone requires 4-hydroxylaminobenzoate lyase (PnbB) activity, which converts 4-hydroxylaminobenzoate (4HAB) to 3,4-dihydroxybenzoate (protocatechuate) and that 4-nitrobenzoate reductase (PnbA) activity, which causes the accumulation of 4HAB from 4NB, does not on its own result in the formation of APOC. This rules out the possibility that 4A3HB is formed abiotically from 4HAB by a Bamberger rearrangement but suggests that PnbB first acts to effect a Bamberger-like rearrangement of 4HAB to 4A3HB followed by the replacement of the 4-amino group by a hydroxyl to form protocatechuate and that the phenoxazinone is produced as a result of some misrouting of the intermediate 4A3HB from its active site.