D-Amino acids, important intermediates in the production of semisynthetic penicillins and cephalosporins, are currently prepared from the corresponding hydantoins using bacterial biomass containing two enzymes, hydantoinase and carbamylase. These enzymes convert the hydantoins first into carbamyl derivatives and then into the corresponding D-amino acids. In an attempt to select more efficient biocatalysts, the hydantoinase and carbamylase genes from Agrobacterium tumefaciens (formerly A. radiobacter) were cloned in Escherichia coli. The genes were assembled to give two operon-type structures, one having the carbamylase gene preceding the hydantoinase gene and the other with the carbamylase gene following the hydantoinase gene. The recombinant strains stably and constitutively produced the two enzymes and efficiently converted the corresponding hydantoins into p-hydroxyphenylglycine and phenylglycine. The order of the genes within the operon and the growth temperature of the strains turned out to be important for both enzyme and D-amino acid production. The configuration with the carbamylase gene preceding the hydantoinase gene was the most efficient one when the biomass was grown at 25 degrees C rather than 37 degrees C. This biomass produced D-amino acid twice as efficiently as the industrial strain of A. tumefaciens. The efficiency was found to be correlated with the level of carbamylase produced, indicating that the concentration of this enzyme is the rate-limiting factor in D-amino acid production under the conditions used on an industrial scale.