Diacetyl is produced by strains of lactic acid bacteria used in the dairy industry. Production of this important flavour compound could be increased by genetic manipulation of genes encoding enzymes involved in diacetyl metabolism. This paper reports the cloning and sequencing of the gene (dar) encoding diacetyl-acetoin reductase from Lactococcus lactis. Analysis of the DNA sequence of the dnr gene and surrounding area revealed the presence of a putative operon with similarity to the family of ABC transporter systems. The nar gene has been deleted from the chromosome by double cross-over homologous recombination.