Rhodococcus strain 124 is able to convert indene into indandiol via the actions of at least two dioxygenase systems and a putative monooxygenase system. We have identified a cosmid clone from 124 genomic DNA that is able to confer the ability to convert indene to indandiol upon Rhodococcus erythropolis SQ1, a strain that normally can not convert or metabolize indene. HPLC analysis reveals that the transformed SQ1 strain produces cis-(1R,2S)-indandiol, suggesting that the cosmid clone encodes a naphthalenetype dioxygenase. DNA sequence analysis of a portion of this clone confirmed the presence of genes for the dioxygenase as well as genes encoding a dehydrogenase and putative aldolase. These genes will be useful for manipulating indene bioconversion in Rhodococcus strain 124.