Mucoidy in Pseudomonas aeruginosa is a critical virulence factor associated with chronic respiratory infections in cystic fibrosis. A cluster of three tightly linked genes, algU, mucA and mucB located at 67.5 min, controls development of mucoid phenotype. This locus is allelic with a group of mutations (muc) associated with conversion into constitutively mucoid forms. One of the genes previously characterized in this region, algU, is absolutely required for the transcriptional activation of algD, a critical event in the establishment of mucoidy. AlgU is homologous to the alternative sigma factor sigma H (Spo0H) controlling sporulation and competence in Bacillus. Two genes downstream of algU, mucA and mucB were further characterized in this study. Previous complementation studies have demonstrated that mucA is required for suppression of mucoidy in the muc-2 strain PAO568. In this work, complementation analysis indicated that, in addition, mucB was required for suppression of mucoidy in the muc-25 strain PAO581, and for enhanced complementation of the muc-2 mutation in PAO568. The complete nucleotide sequence of mucA and mucB was determined. Insertional inactivation of mucB on the chromosome of the standard genetic strain PAO resulted in mucoid phenotype, and in a strong transcriptional activation of algD. Thus, a loss of mucB function is sufficient to cause conversion of P. aeruginosa into the mucoid phenotype. Since the algU-mucA-mucB region is a general site where muc mutations have been mapped, it is likely that mucB participates in the emergence of mucoid forms. Both mucA and mucB play a regulatory role in concert with the sigma-like factor AlgU; all three genes, along with signal transduction and histone-like elements, control differentiation of P. aeruginosa into the mucoid phenotype.