Conversion to mucoidy, caused by the overproduction of the exopolysaccharide alginate in laboratory and cystic fibrosis strains of Pseudomonas aeruginosa, can occur via frameshift or nonsense mutations in the second gene of the algU mucA mucB cluster. The first gene of the cluster, algU, encodes a putative alternative sigma factor required for algD transcription. The algD gene encodes a critical alginate biosynthetic enzyme and is invariably activated in mucoid P. aeruginosa cells. To investigate the function of the genes controlling conversion to mucoidy, the wild-type algU mucA mucB cluster from the standard genetic strain PAO1 was used to reconstitute algD transcription in Escherichia coli. Transcription of an algD-lacZ chromosomal fusion in E. coli was detected upon introduction of plasmid-borne algU mucA mucB. Moreover, insertional inactivation of either mucA or mucB resulted in further stimulation of transcriptional activity from the algD promoter. This activation was dependent on algU, since a double algU mucA mutation abrogated transcription of algD. These experiments suggest that the phenotypic manifestations of muc mutations, i.e., increased algD expression and mucoid phenotype, depend on the presence of an active algU gene and that this regulator and the factors encoded by the downstream genes interact. Further support for these conclusions came from the investigations of the mechanism of reversion to nonmucoidy in P. aeruginosa, a phenomenon frequently referred to as the instability of mucoid phenotype. Spontaneous nonmucoid derivatives of the mucoid strain PAO578 carrying the mucA22 mutation were examined for the presence of alterations within the algU mucA mucB locus. Point mutations which inactivated algU were detected in some, but not all, nonmucoid revertants. No reversion of the original mucA22 mutation (a deletion of one C) was observed in any of the investigated strains. This observation suggests that the process of conversion to nonmucoidy ban be explained, at least partially, by second-site suppressor mutations and that a fraction of such mutations occurs in algU.