The molecular regulation of methane oxidation in the first fully authenticated facultative methanotroph Methylocella silvestris BL2 was assessed during growth on methane and acetate. Problems of poor growth of Methylocella spp. in small-scale batch culture were overcome by growth in fermentor culture. The genes encoding soluble methane monooxygenase were cloned and sequenced, which revealed that the structural genes for soluble methane monooxygenase, mmoXYBZDC, were adjacent to two genes, mmoR and mmoG, encoding a sigma54 transcriptional activator and a putative GroEL-like chaperone, located downstream (3') of mmoC. Transcriptional analysis revealed that the genes were all cotranscribed from a sigma54-dependent promoter located upstream (5') of mmo X. The transcriptional start site was mapped. Transcriptional analysis of soluble methane monooxygenase genes and expression studies on fermentor grown cultures showed that acetate repressed transcription of sMMO in M. silvestris BL2. The possibility of the presence of a particulate, membrane-bound methane monooxygenase enzyme in M. silvestris BL2 and the copper-mediated regulation of soluble methane monooxygenase was investigated. Both were shown to be absent. A promoter probe vector was constructed and used to assay transcription of the promoter of the soluble methane monoxygenase genes of M. silvestris BL2 grown under various conditions and with different substrates. These data represent the first insights into the molecular physiology of a facultative methanotroph.