We have identified an operon and characterized the functions of two genes from the severe food-poisoning bacterium, Bacillus cereus subsp. cytotoxis NVH 391-98, that are involved in the synthesis of a unique UDP-sugar, UDP-2-acetamido-2-deoxyxylose (UDP-N-acetyl-xylosamine, UDP-XylNAc). UGlcNAcDH encodes a UDP-N-acetyl-glucosamine 6-dehydrogenase, converting UDP-N-acetylglucosamine (UDP-GlcNAc) to UDP-N-acetyl-glucosaminuronic acid (UDP-GlcNAcA). The second gene in the operon, UXNAcS, encodes a distinct decarboxylase not previously described in the literature, which catalyzes the formation of UDP-XylNAc from UDP-GlcNAcA in the presence of exogenous NAD(+). UXNAcS is specific and cannot utilize UDP-glucuronic acid and UDP-galacturonic acid as substrates. UXNAcS is active as a dimer with catalytic efficiency of 7 mM(-1) s(-1). The activity of UXNAcS is completely abolished by NADH but unaffected by UDP-xylose. A real-time NMR-based assay showed unambiguously the dual enzymatic conversions of UDP-GlcNAc to UDP-GlcNAcA and subsequently to UDP-XylNAc. From the analyses of all publicly available sequenced genomes, it appears that UXNAcS is restricted to pathogenic Bacillus species, including Bacillus anthracis and Bacillus thuringiensis. The identification of UXNAcS provides insight into the formation of UDP-XylNAc. Understanding the metabolic pathways involved in the utilization of this amino-sugar may allow the development of drugs to combat and eradicate the disease.