The intestinal bacterium Eubacterium sp. strain VPI 12708 has been shown to have a bile acid 7 alpha/7 beta-dehydroxylation pathway. A large bile acid inducible (bai) operon encoding at least 9 open reading frames has been cloned and sequenced from this bacterium. The baiE gene from this operon has been subcloned and expressed in E. coli and found to encode a bile acid 7 alpha-dehydratase (BA7 alpha D). The purified BA7 alpha D was shown to have a calculated subunit mass of 19 kD and a relative native molecular weight of 36,000. The Km and Vmax for 7 alpha, 12 alpha-dihydroxy-3-oxo-4-cholenoic acid was 0.16 mM and 0.48 nmol/min per mg protein, respectively. Of the substrates tested, the BA7 alpha D used only 7 alpha, 12 alpha-dihydroxy-3-oxo-4-cholenoic acid and 7 alpha-hydroxy-3-oxo-4-cholenoic acid as substrates. A molecular modeling program (SYBYL) was used to calculate the energy differences between the various intermediates in the 7 alpha-dehydroxylation pathway. A marked energy difference (-9.4 kcal/mol) was observed between 7 alpha, 12 alpha-dihydroxy-3-oxo-4-cholenoic acid and 12 alpha-hydroxy-3-oxo-4,6-choldienoic acid, possibly accounting for the apparent irreversibility of the bile acid 7 alpha-dehydratase reaction under our experimental conditions. No significant amino acid sequence homologies were found between BA7 alpha D and other proteins in the data base; however, BA7 alpha D does contain a lipocalin signature sequence, possibly indicating a bile acid binding domain. The bile acid 7 alpha-dehydratase appears to be a unique enzyme in the bacterial bile acid 7 alpha-dehydroxylation pathway.