Azorhizobium caulinodans strain ORS571 induces nitrogen-fixing nodules on roots and stem-located root primordia of Sesbania rostrata. Two essential Nod loci have been previously identified in the bacterial genome, one of which (Nod locus 1) shows weak homology with the common nodC gene of Rhizobium mehloti. Here we present the nucleotide sequence of this region and show that it contains three contiguous open reading frames (ORFA, ORFB and ORFC) that are related to the nodABC genes of Rhizobium and Bradyrhizobium species. ORFC is followed by a fourth (ORF4) and probably a fifth (ORF5) open reading frame. ORF4 may be analogous to the nod[ gene of R. leguminosarum, whereas ORF5 could be similar to the rhizobial nodF genes. Coordinated expression of this set of five genes seems likely from the sequence organization. There is no typical nod promoter consensus sequence (nod box) in the region upstream of the first gene (ORFA) and there is no nodD-like gene. LacZ fusions constructed with ORFA, ORFB, ORFC, and ORF4 showed inducible -galactosidase expression in the presence of S. rostrata seedlings as well as around stem-located root primordia. Among a series of phenolic compounds tested, the flavanone naringenin was the most efficient inducer of the expression of this ORS571 nod gene cluster.