The study on the localization of the pac gene indicated that the regulatory and structural genes were located in a 3.5 kb HindIII-EcoRI fragment. In this paper we report that a series of deletion derivatives of plasmid pPA6 was constructed and the effect of deletions on the pac expression was determined. The results suggested that the pac regulatory gene was located in the SphI-PvuII fragment within the pac structural gene. Then the SphI-PvuII fragment was cloned to the plasmid pTZ18U at the SphI-SmaI sites and the resultant plasmid pPA57 was transformed into the penicillin acylase producing strain E. coli D816 to observe the effect of SphI-PvuII fragment on the chromosomal pac expression. The results demonstrated that the regulatory gene within the SphI-PvuII fragment regulated the pac expression in trans. Computer analysis indicated that there were two ORFs in the SphI-PvuII fragment as possible candidates coding for the regulatory protein. The study on precise localization of the pac regulatory gene is in progress.