A Photobacterium strain, M37, showing lipolytic activity, was previously isolated from an intertidal flat of the Yellow Sea in Korea and identified as Photobacterium lipolyticum sp. nov. In the present study, the corresponding gene was cloned using the shotgun method. The amino acid sequence deduced from the nucleotide sequence (1,023 bp) corresponded to a protein of 340 amino acid residues with a molecular weight of 38,026. No sequence similarity was found with any known bacterial lipases/esterases; instead, the most similar enzymes were several filamentous fungal lipases. Although the similarity was very low (less than 16%), there were many conserved regions over the entire sequence and N-terminal oxyanion hole (RG) region, a signature sequence of filamentous fungal lipases. The novel protein M37 was produced in both a soluble and insoluble form when the Escherichia coli cells harboring the gene were cultured at 18 degrees C. The soluble protein exhibited lipase activity in a pH-stat assay using an olive oil emulsion. The M37 lipase also displayed a maximum activity at 25 degrees C and maintained its activity at a low temperature range (5-25 degrees C) with an activation energy (E(a)) of 2.07 kcal/mol. Accordingly, these results indicate that the M37 lipase from P. lipolyticum sp. nov. is a new cold-adapted enzyme.