The glyoxylate cycle occurs in the three domains of living organisms: Eukarya, Bacteria and Archaea. We have isolated and sequenced the ace (acetate assimilation) gene operon, comprising the glyoxylate cycle key enzymes isocitrate lyase and malate synthase genes (icl or aceA and ms or aceB), from the halophilic archaeon Haloferax volcanii. This is the first time that these genes are sequenced in an organism from the domain Archaea. Phylogenetic analysis of the sequenced genes revealed that isocitrate lyase shows a significant identity with isocitrate lyases from Eukarya and Bacteria, but it is not more closely related to eukaryal or bacterial enzymes, and that malate synthase from H. volcanii has very little identity with any other known protein. This enzyme forms a new class of malate synthases. Transcriptional analysis indicated that both genes are cotranscribed in a single 2.7 kb mRNA molecule. The genes were transcribed only when acetate was the carbon source, indicating transcriptional regulation. Two sets of palindromic sequences were found in the promoter region, possibly involved in binding of transcriptional regulators (repressors and/or activators).