The nucleotide sequences of the glpQ and ugpQ genes of Escherichia coli, which both encode glycerophosphoryl diester phosphodiesterases, were determined. The glpQ gene encodes a periplasmic enzyme of 333 amino acids, produced initially with a 25 residue long signal sequence, while ugpQ codes for a cytoplasmic protein of 247 amino acids. Despite differences in size and cellular location, significant similarity in the primary structures of the two enzymes was found suggesting a common evolutionary origin. The 3' end of the ugpQ gene overlaps an open reading frame that is transcribed in the opposite direction. This open reading frame encodes a polypeptide with an unusual composition, i.e., 46 of the 146 amino acids are Gln or Asn. This polypeptide and the UgpQ protein were identified in an in vitro transcription/translation system as proteins with apparent molecular weights of 19.5 and 27 kDa, respectively.