The lactose transposon Tn951 on the IncP plasmid RP1, was introduced into a strain of Zymomonas mobilis. The lac Z gene was expressed and US -galactosidase was produced. The synthesis of US -galactosidase was induced by either isopropyl-US -D-thiogalactopyranoside or lactose, and was not sensitive to catabolite repression. Cells of Zymomonas mobilis containing Tn951 were unable to form colonies on lactose plates, but in liquid medium produced ethanol from lactose as the sole carbon source. The original strain of Zymomonas mobilis without Tn951 produced little or no US -galactosidase and was unable to produce ethanol from lactose in liquid medium.