Cytochrome P-450BM-3 (P-450BM-3) from Bacillus megaterium incorporates both a P-450 and an NADPH:P-450 reductase in proteolytically separable domains of a single, 119-kDa polypeptide and functions as a fatty acid monooxygenase independently of any other protein. A 5-kilobase DNA fragment which contains the gene encoding P-450BM-3 was sequenced. A single continuous open reading frame starting at nucleotide 1541 of the 5-kilobase fragment correctly predicted the previously determined NH2-terminal protein sequences of the trypsin-generated P-450 and reductase domains and, in toto, predicted a mature polypeptide of 1,048-amino acid residues with Mr = 117,641. The trypsin site was found at arginine residue 471. The P-450 domain is most similar (about 25%) to the fatty acid omega-hydroxylases of P-450 family IV, while the reductase domain exhibits some 33% sequence similarity with the NADPH:P-450 reductases of mammalian liver. Both the P-450 and reductase domains of P-450BM-3 define new gene families but contain highly conserved segments which display as much as 50% sequence similarity with P-450s and reductases of eukaryotic origin. The mRNA for P-450BM-3 was found by S1 mapping to be 3,339 +/- 10 nucleotides in length. In the accompanying paper, two regions in the 1.5 kilobases 5' to the P-450BM-3 coding region have been implicated in the regulation of P-450BM-3 gene expression.