The LAC12 gene of Kluyveromyces lactis codes for an inducible lactose permease. We have determined the nucleotide sequence of a DNA fragment which includes the complete LAC12 gene. The 4.7-kilobase (kb) mRNA carrying LAC12 contained two open reading frames, ORFI (1761 bases) and ORFII (1266 bases), separated by a 573-base pair noncoding region. Mung bean and exonuclease VII mapping showed that there was no splicing of the 4.7-kb transcript and thus no intron between the two open reading frames. Chromosomal disruption of ORFI with the URA3 gene destroyed lactose transport activity, suggesting that ORFI codes for a component of the permease. Disruption of ORFII and the noncoding region between the two open reading frames did not affect the lactose permease function, indicating that they do not comprise a part of the permease. We do not know if ORFII is translated, but in either case, the structure of the 4.7-kb mRNA is unusual. We discuss possible origins for it. The peptide predicted from ORFI is hydrophobic as would be expected for a membrane-bound protein. Compared with other membrane proteins, LAC12 (ORFI) protein showed sequence similarity to the human glucose and the Escherichia coli xylose-H+ and arabinose-H+ transporters. No obvious amino acid sequence similarity was found with the lactose permease of E. coli.