Escherichia coli expressing group II capsules are associated with extra-intestinal diseases. E. coli expressing group II capsules have elevated CMP-KDO synthetase activity, with both enzyme activity and polysaccharide biosynthesis being temperature dependent. The locus (kps) necessary for biosynthesis of group II polysaccharides is organized into three functional regions, two of which (I and III) are conserved among different kps gene clusters. Determination of the nucleotide sequence of region I, of the K5 capsule gene cluster, revealed five genes (kpsE, kpsD, kpsU, kpsC and kpsS) possibly organized into a single transcriptional unit. One of the genes, kpsU, encoded for a functional CMP-KDO synthetase and was 65.5% identical to kdsB of non-encapsulated E.coli. Whilst high level CMP-KDO synthetase activity was not essential for K5 polysaccharide synthesis, it was important for encapsulation. Disruption of either kpsC or kpsS resulted in cytoplasmic polysaccharide, suggesting a role for their products in an early stage of capsule biosynthesis. Whilst disruption of kpsE and kpsD generated periplasmic polysaccharide indicating a role for their products in the final stages of polysaccharide export. KpsE, KpsC and KpsS were homologous to proteins encoded by the capsule gene clusters of Haemophilus influenzae and Neisseria meningitis, suggesting a common functionality in the expression of capsules between these bacteria. Analysis of the region II-nucleotide sequence revealed four genes which are required for polysaccharide synthesis. This region II-sequence had a low GC content, atypical for the average GC ratio of E.coli DNA. The 3' end of kpsS and kpsT genes also had a low GC content. Since KpsS and KpsT encoded by different kps gene clusters had variable C- termini, it is possible that region II of the K5 capsule gene cluster might have been acquired by recombination events occured within kpsS and kpsT.