Rhodococcus sp. strain T104 is able to utilize both limonene and biphenyl as growth substrates. Furthermore, T104 possesses separate pathways for the degradation of limonene and biphenyl. Previously, we found that a gene(s) involved in limonene degradation was also related to indigo-producing ability. To further corroborate this observation, we have cloned and sequenced a 8,842-bp genomic DNA region with four open reading frames, including one for indole oxygenase, which converts indole to indigo (a blue pigment), The reverse transcription PCR data demonstrated that the identified indole oxygenase gene is specifically induced by limonene, thereby implicating this gene in the degradation of limonene by T104.