We have cloned the Saccharomyces cerevisiae gene coding for the peroxisomal enzyme: fatty acyl-CoA oxidase (POX). The gene (named POX1) is unique in S. cerevisiae and has been identified through homology with the POX4 and POX5 genes of Candida tropicalis. The POX1 gene encodes a 84-kDa POX protein composed of 748 amino acids. The identity between the S. cerevisiae and C. tropicalis enzymes is about 40%, and there is a greater degree of similarity between the N termini than the C termini. A disruption of the POX1 coding sequence diminishes the ability of yeast cells to grow on oleic acid as a sole carbon source. The expression of the POX1 gene is regulated at the level of transcription, and is induced more than 25-fold by the addition of oleic acid to the medium.