The Mcr systems (previously known as Rgl systems) ofEscherichia coli recognize and cleave specific sequences carrying methylated or hydroxymethylated cytosines. We have cloned the mcrA gene and determined its nucleotide sequence. An 831 base pair sequence encodes the McrA protein. Analysis of the sequence data reveals that there arc additional ORFs internal to the above. A phage T7 expression system was used to determine the protein products encoded by the cloned mcrA gene. The results clearly show that a 31 kDa polypeptide is responsible for McrA activity. This is in agreement with the molecular weight deduced from sequence data. McrA protein was found to be localized in the outer membrane ofEscherichia coli. To our knowledge this is the first restriction enzyme localized in the outer membraneof Escherichia coli.